This study examines the application of the thawāb and 'iqāb methods in forming the character of students in Islamic elementary school in Aceh Besar. Thawāb and 'iqāb are methods done by giving reward (thawāb ) on learners who are excellent or well behaved and punishment (' iqāb) for those who violate the rules or do not behave well. In applying the method thawāb and 'iqāb in this educational program, problems arises between them those are which method should comes first and which should be mostly given to children as well as which one is more effective in forming the character of students. The results showed that: 1) the forms of applied thawāb are material and immaterial things. The method forms 'iqab which is applied in Islamic elementary School in Aceh Besar is in form of 'iqab with cues, 'iqāb with words, as well as 'iqab with deeds or action.2) Among the methods thawāb and 'iqāb, more effective method in forming the character of students is thawāb method because of its influence on student character changes more durable than the application of' iqāb. Regarding which method is more effective, it cannot be determined certainly, because every child needs a different treatment. However, in general it can be concluded that in Islamic elementary school in Aceh Besar thawab method used more dominant it can seen from the attitude of the educators were more put thawāb method of the 'iqāb. 3) The obstacle faced in applying thawāb is related to financial. It need more money when the goods is quite expensive. Whereas the obstacle faced in the applying 'iqab is generally associated with fears of a disagreement with a parent about giving 'iqāb applied in schools.