Celeste Ng’s novel Everything I Never Told You has received critical acclaim since its publication in 2014, significantly contributing to the development of Chinese American literature. Centring on issues of race, gender, and family dynamics in a 1970s interracial family, this novel has attracted extensive research on themes of racial discrimination, identity crises, feminism, and family education. However, few studies have examined the protagonist, Lydia’s ethical dilemmas and her path towards self-redemption from the perspective of Ethical Literary Criticism. Applying Nie Zhenzhao’s theory as the primary theoretical framework, the present paper adopts a close textual and thematic analysis of the novel to analyze the ethical dilemmas that stem from the profound impact of dysfunctional parent-child relationships on individuals’ ethical self-awareness, investigate individuals’ ethical selections and their agency in navigating ethical dilemmas, and explore how family dynamics and cultural conflicts shape the construction of individuals’ ethical identity during their pursuit of self-redemption. By providing insights into the investigation of the interplay between family dynamics and individuals’ growth within a mixed-race family, this research also contributes to the practical application of Ethical Literary Criticism through integrating concepts from psychology and sociology.