Using the critical incident approach, preschool teachers at 10 preschools in Sweden were asked to describe their work with respect to ethnic and cultural diversity. The study attempted to provide insights that go beyond commonly used models of intercultural sensitivity and intercultural competence (e.g. Gudykunst and Kim; Landis, Bennett, and Bennett). Four different understandings and approaches to ethnic and cultural diversity were discernible in the empirical material (i.e. "instrumental," "co-productive," "facilitative proactive," and "agitative proactive"). The data suggest that preschool teachers, in order to be interculturally competent, need to work systematically with intercultural pedagogy, intercultural communication skills, and with their discursive awareness. Moreover, it is concluded that if preschool teachers fail to scrutinize their own values, modes of behavior, and a-priori understanding of what "is" cultural behavior, they may sustain cultural stereotypes. (Contains 1 note and 1 table.)