Shame management is purported to be part of the healing process that is a goal of restorative justice. However, the development of shame management capacities and how they are engaged in conflict resolution remains a relatively understudied phenomenon. This study examines how shame management (acknowledgment and displacement) is employed by children as they move into and out of cultures of school bullying. The analysis is based on self-reported changes in bullying experiences of 335 Australian children over a three-year period. Children were classified into bully, victim, bully-victim, nonbully-nonvictim, or residual conflict groups. Shame displacement and bullying tolerance accompanied transition into bullying. Shame acknowledgment and control of bullying marked desistence from bullying. Effects of shame management and social control were not uniform across groups. Findings indicate that interventions to change behaviour need to be flexible and responsive to prior bullying experiences so specific risk and protective factors can be targeted. This study demonstrates that responsiveness to context, building socially responsible relationships, and adaptive shame management are all integral to behaviour change, supporting the use of restorative justice as a way of dealing with school bullying as well as other forms of harm.