This interpretive study identifies challenges of working with Bedouin and Jewish Israeli youth in two multicultural projects: education for sustainability and place-conscious education. It also describes the ways the adult project leaders addressed these challenges and their views on the effectiveness of their decisions. Participants comprised 16 Bedouin and Jewish educators. Data collection included interviews and observations of project meetings and staff meetings. Project leaders reported challenges related to (1) intergroup differences in environmental viewpoints, knowledge, and learning styles, (2) embedding issues of environmental justice in the multicultural discourse, and (3) Bedouin-Jewish interactions. To address these challenges, the leaders separated groups for some learning activities, directed discourses, adopted bilingual teaching strategies, and emphasized unique socio-cultural characteristics. Their level of satisfaction with most of their decisions is high. They avoided discussing the broader socio-political Arab-Jewish conflict. The findings highlight dilemmas that multicultural environmental projects pose and suggest the need to adopt critical pedagogy of place to address such dilemmas and challenges. The findings also emphasize the need to better prepare educators for environmental education in multicultural settings.