Eiichi Shibusawa (1840-1931), a leading figure in the development of Japan’s modern society, is often referred to as the “father of Japanese capitalism.” He participated in the establishment of more than 500 enterprises and economic organizations. Nowadays, he is remembered mostly as an “ethical capitalist,” or more specifically, a“Confucian capitalist.” His famous work, The Analects of Confucius and the Abacus, is widely known in Japan, and other countries. With a view to establishing a connection between Eiichi Shibusawa and The Analects, this paper reconsiders Eiichi Shibusawa’s experiences in his youth, and analyzes what he had learned and experienced, especially his encounter with the Analects. First, this paper investigates the social background of Eiichi Shibusawa’s thought, and summarizes it in the following three points: 1)the situation of Sinology education in the late Edo period, 2)the characteristics of the rich peasant class in the late Edo period,and 3) the business ethics thought of Edo merchants. Second, this paper investigates the persons who had important impacts on the formation of Eiichi Shibusawa’s thoughts, such as his father Uemon Ichiro, his cousin Atutada Odaka, and Confucian Kikuzyou Kikuti. Finally, the paper summarizes young Eiichi Shibusawa’s understanding of the Analects.