The Year 8 pupils at Cooper School in Bicester, Oxfordshire, were asked to research the murder of a two-year-old boy.
He was abducted, tortured and killed by two 10-year-old boys, Robert Thompson and Jon Venables, in 1990.
Parents at the school claim pupils were asked to do homework on the case in preparation for a religious education class on 'God' and 'evil'.
Dad Rob Gregg has a son at the Oxford co-educational secondary school and posted a photo of the homework slip on Twitter.
Alongside the picture, he tweeted: 'Cooper school Bicester asking their year 8 students (12 year old's) to research this. WTF, my boy will be having nightmares for weeks now.' The homework assignment which is due to be completed by February 5, asked pupils to 'make sure you look at respectable websites' such as the BBC and newspapers to 'avoid inappropriate material'.
The school appeared to be aware that the assignment could come as a surprise to parents and attached a note for them in the homework slip.
It reads: "Please can we assure you that the covering of the James Bulger case was a very carefully considered decision.
"We are currently studying God and Evil in Year 8 and, within this, considering the problem of evil.
"...Focusing on one specific case of 'evil' we have found to be an effective way to evaluate the compatibility of a belief in God with the existence of evil (we have covered this topic, intermittently, for a number of years).
"Full harrowing specifics of the case are not necessary and will not be covered."
The note asked parents to contact the school directly if they had any concerns but many parents chose to express their views on Facebook instead.
After Rob Gregg's tweet was shared to a Bicester resident's Facebook page, more than 100 people took to the comments to share their thoughts on the homework assignment.
One mum said: "My daughter is Year 8 at Cooper and it was my comment that I have no problem with her doing this.
"She is mature and level-headed, not easily scared or upset and rather analytical with facts.
"They clearly explained how it ties into RE and I think they probably chose this case specifically as the kids involved were close to their age group which provides an eye-opener to the world.
"Once they get to a certain age you can't wrap them up in cotton wool and protect them from the world."
She said the school have now 'pulled' the homework.
Another respondent said: "That is a disgrace!
"In all my 20 years compiling class packs and lesson resources for years 7-14 I have never seen anything so out of order!"
James Bulger, two, was abducted and murdered by two 10-year-old boys, Robert Thompson and Jon Venables.
They led him away from a shopping centre in Merseyside in 1993.
Several Bicester residents recalled how they were also taught about the case years ago at Cooper School.
One man, also commenting on Facebook, said: "It's a relevant and important moment in history that has shaped the way in which our justice system handles juvenile offenders.
"Brilliant learning opportunity. Hats off to Cooper School for being brave enough to try this."
Another added: "I believe our youngsters should be allowed to look at such subjects in a balanced way and will become aware that life is not always pleasant but they will learn lessons for the future.
"School is the right place to look at these incidents and It is a shame that the school has now pulled the work because of the objection of a few."
One former Cooper student, now aged 32, said: "We studied this in Year 8 - if anything it made me more aware of the dangers out there but never traumatised me in any way."
The school has been approached for comment.