This paper explores how ethnographic and action research methodologies can be justifiably combined to create a new methodological approach in educational research. It draws on existing examples in both educational research and development studies that have discussed the use of ethnography and action research in specific projects. Interpretations of ethnography and action research are developed that aim to minimize the epistemological differences between them. The paper also contextualizes an "ethnographic action research" approach with reference to an example of the author's research into participation in three "reception" (first year of schooling) classes in the United Kingdom. It is argued that research into the theme of participation in early years education, using participative methods, was particularly suitable for this new methodological approach. (Contains 1 table.)