Alternative education schools are a relatively recent phenomenon in the Palestinian-Arab society in Israel. They have been established in response to the growing dissatisfaction with the education provided by the state in mainstream schools. While previous research has sufficiently detailed their characteristics, there is little research on the challenges that face Palestinian-Arab alternative schools in Israel. The findings in this article are a synthesis of data gathered over three years and are drawn from interviews with key school stakeholders and observations of staff training sessions. Key external and internal challenges are identified and discussed. The article concludes by addressing the implications of the challenges for the future of alternative education in Palestinian-Arab society in Israel.