This paper explores how teachers' beliefs and practices create spaces for the contestation and innovation of bilingual intercultural education (BIE) policy, a policy of indigenous culture and language revitalization in Peru. Based on ethnographic research, there are two central arguments developed throughout this paper. First, the author argues that unaddressed issues in the definition of BIE policy, namely its top-down design and vague treatment of the intercultural element, contribute to its problematic implementation. Under BIE the school has likely remained a space of exclusion of indigenous languages and cultures. Second, using empirically documented teacher data, the author argues that teachers are central to reproducing inequalities and contesting social structures through the implementation of policy. This paper aims to challenge common assumptions about the limited (passive) role of teachers as policy actors. Although bilingual teachers continue to contest and transform BIE policy in rural schools, their actions have remained unnoticed; thus opportunities for ground-up innovation to reach and transform the official discourse have been missed. This paper places at the center of language and policy research and, in particular, of bilingual education, the urgency to understand local practitioners--beyond the school setting--at the policy level. (Contains 1 table.)