This article gives a methodological overview of Value-based Engineering for ethics by design. It discusses key challenges and measures involved in eliciting, conceptualizing, prioritizing and respecting values in system design. Thereby it draws from software engineering, value sensitive design, design thinking and participatory design as well as from philosophical sources, especially Material Ethics of Value. The article recognizes timely challenges for Value-based Engineering, such as compatibility with agile forms of system development, responsibility in hardly controllable ecosystems of interconnected services, fearless integration of external stakeholders and the difficulty in measuring the ethicality of a system. Finally, the Value-based Engineering methodology presented here benefits from learnings collected in the IEEE P7000 standardization process as well as from a case study. P7000 has been set up by IEEE to establish a process model, which addresses ethical considerations throughout the various stages of system initiation, analysis and design.