Immigration is an integral phenomenon of our globalising world. The increasing flow of people creates new challenges for educational institutions and workplaces. The purpose of this article is to address challenges that vocational teachers face with diversity at colleges and workplaces. Two research questions are addressed: how do teachers prepare immigrant students for working life? What challenges related to intercultural competence do teachers preparing immigrant students for working life face? The theoretical background lies in cultural-historical activity theory, developmental work research and in the concept of intercultural competence. The change laboratory method used in study is a formative intervention method evolved within developmental work research. The data comprised two change laboratories organised at the same vocational college in 2001 and 2011. The results showed that teachers' work with multicultural students and groups can be developed by following five perspectives: preparation, reflection, contribution, guidance and responding. Intercultural competence is constructed contextually and is intertwined with activities such as teaching, facilitating students' learning and cooperating with wor kplaces. The participants of the change laboratories experienced it as a good instrument for their intercultural work. Based on the results, some implications are suggested.