Differentiated instruction (DI) has received extensive attention in general teacher education. Little research, however, has specifically focused on language teachers' understanding of DI, particularly the developmental trajectory of their understanding. The present study, framed within and informed by sociocultural theory, investigated EFL teachers' understanding of DI through exposure to and investigation of their own video-recorded classroom performance. The teachers also received three scaffolding sessions in which a number of DI-related notions were introduced to them to mediate the development of their understanding microgenetically. Analyses of the data revealed changes in the language with which teachers' understanding of the concepts was articulated and the scope of the understanding. Furthermore, the results of post-scaffolding interviews showed that the initiative had been productive in assisting the teachers with developing awareness of individual differences, particularly its contribution to enhancing their management skills.