Adolescence is characterized by heightened risk-taking and independence from parents; these tendencies seem to be magnified by the opportunities afforded through online interactions. Drawing on Kohlberg's Cognitive Moral Development (CMD) theory, we conduct a qualitative study of 12 parent-adolescent dyads that examines the interplay between parenting behaviors and adolescent moral development. We show an association between adolescent moral judgment and online behavior, and we illustrate how parenting style and mediation strategies influence teens' moral growth and decision making about online behaviors. We also note that parental mediation strategies are moderated by parents' digital literacy: reduced digital literacy is associated with more restrictive or indulgent strategies; while more digitally competent parents are more likely to monitor and mediate their teen's behaviors as they engage online. We also found that experience, not restriction, facilitates the teen's moral growth.