With studies on the physical environment of preschools concentrating mostly on settings in the Western world, before establishing minimum standards of quality, developing contextually appropriate physical environment factors become pertinent in Malaysia as a universal and possibly unaffordable high-quality standard may lead to ill-informed policy decision and allocation of funds (UNESCO 2006. "EFA Global Monitoring Report 2007. Strong Foundations?: Early Childhood Care and Education"). As a preliminary study, this conceptual paper sets out to uncover factors for consideration to achieve a contextually appropriate physical environment. In this article, 'preschool' denotes establishments for children aged four to six years in diverse educational settings. This article draws from two major fields: preschool education and physical environment of preschools. After secondary analysis of data, preliminary findings critically analysed from reviews of literature through a cross-disciplinary approach indicated that factors for consideration to achieve contextual appropriate physical environment include understanding the curriculum content; learning belief and culture of learning; physical environment factors (including allowable premise for establishing preschools, spatial planning, environmental condition and interior fit out) and statutory requirements (including health and safety factors and existing guidelines). Recommendations for future direction are discussed.