This paper discusses major challenges for the development of teacher education for inclusion through an analysis of relevant recent experience in Malta. Inclusion in society and in education has been explicitly on the Maltese national agenda for the past two decades. The Faculty of Education of the University of Malta has been one of the main actors of the inclusion initiative and has also taken a European initiative through the recent co-ordination of a seven-country, 3-year European Union Comenius project on preparing teachers for responding to student diversity. This paper is based mostly on the reflective experience of the author at the Faculty of Education over the past several years. A brief picture of the Maltese education system is followed by a description of the challenges that have been encountered in the promotion of inclusion. These include the development of a rights-based approach to the education of persons with disability and the widening of its application to all minority or disadvantaged groups, and the impact of political and social contexts on the development of inclusive schools. These developments are then related to intertwined initiatives for teacher education for diversity that were further influenced by the leadership of deans and heads of the department in the faculty of education. Finally, four current issues are highlighted, namely: the strategic balance between the education of specialist educators and that of all teachers for diversity, and between specific and infusion models for such education, and, finally, the pedagogic balance between the academic and experiential learning about inclusion, and between the theory and practice of inclusive teaching.