In the United Kingdom (UK) particularly, grouping strategies in secondary education have attracted considerable political attention. While setting students by ability is frequently adopted in mathematics, English and science, mixed-ability grouping is common in other subjects, including physical education (PE). Educational research exploring grouping has highlighted the need for research to extend understanding of the pedagogical assumptions, challenges and/or opportunities associated with the use of mixed-ability grouping in various subject and school settings. This case study research sought to examine mixed-ability grouping with a particular focus on how this grouping strategy was enacted in Key Stage 3 (Years 7, 8 and 9) and Key Stage 4 (Years 10 and 11) PE lessons in a secondary school in England, and how issues of ability and inclusion are expressed in the enactment of this grouping strategy. Data from in-depth, semi-structured interviews with seven PE teachers is reported. The findings illustrate the various ways in which teachers' enactment of mixed-ability grouping is framed by discourses of sport performance and gendered discourses, and highlight, in particular, the impact that 'grouping within groups' has for the learning opportunities that different students are able to access in PE. The analysis and discussion critically examine the conceptualisations of ability and inclusion inherent in the mixed-ability grouping practices at the case study school. The conclusion identifies a need for further research involving a larger sample of schools and teachers to extend the insights about mixed-ability grouping practices in PE generated by this study.