The aim of education is to draw the best out of man. It is to help in the all-round development of wholesome and well integrated personality. It is also to help in the formation of desirable moral and national character in the school children. So some knowledge of psychology of personality and its role as an educational foundation is essential for the working teachers and prospective teachers. It is clear that development of personality and character formation are closely related to the educative process. Teachers, who are charged with responsibility of bringing about the all-round development in the students under their custody, should rightly know about the nature, cause and effect, factors involved and educational implications of personality development and character formation to be able to plan the educational plans and programmes wisely and intelligently. Healthy development of the individual and his personality may be regarded as one of the aims of education. Education, if it is to achieve this aim, has to be well-rounded and not just concerned with subject-matter, Education has to be arranged that it helps the process of personality development that we have discussed.