The last 40 years have seen great political attention paid to issues of inclusion in education, both from international organisations and also individual nations. This flexible concept has been adopted enthusiastically in education reforms concerned with increased standardisation of teaching and learning, decentralisation of education management, reduced teacher autonomy and marketisation of school systems. This paper draws from a research project that explores inclusion as part of the education transformations in England and Sweden. These two countries have been very different in their state governance and welfare regimes, but have been following similar directions of reform in their education systems. The paper evaluates the changing policy assumptions and values in relation to inclusion in the schooling changes of the last few decades, through an analysis of policy contexts and processes, and a presentation of selected empirical material from research in the two countries. We argue that, despite the similar dominant discourses of competition and marketisation, the two education systems draw on significantly different paradigms of operationalising inclusion, with distinct outcomes regarding equality.