This research aims to develop fairy tale learning using a problem based learning model, a puppet-assisted storytelling method that contains character education in class IV elementary schools. The development of fairy tale learning is presented using hand puppets. This development is aimed at class IV students at SD Muhammadiyah Surusunda. This research uses the research and development (R&D) method. The model in this development research is the ADDIE model. The research phase was designed in five stages, namely: (1) Analysis and problems, (2) Design, (3) development, (4) implementation, and (5) evaluation. The results of the research show that the development of fairy tale learning using a problem based learning model, a puppet-assisted storytelling method that contains character education, is suitable for use in learning and is effective in increasing students' understanding and is able to build better character education. Thus, learning fairy tales with the help of hand puppets is suitable for use by fourth grade elementary school students.