This report uses case illustrations to present ten policy issues concerning inclusion of children with disabilities in early childhood education programs. Policy issues were identified from interviews with over 150 families, teachers, and district and state education agency administrators, as well as through many classroom observations. An introduction examines the social-political aspects of education, policy versus practice, and the changing social context. For each issue there is a brief explanation, some data, and a case example of an actual child. The policy issues address the following areas: (1) categorical programs, (2) categorical funding, (3) categorical thinking, (4) the cultural context of education, (5) the community context of education, (6) professional development and practice, (7) litigation and inclusion, (8) regulation and compliance or accountability and quality, (9) the ebb and flow of public dollars, and (10) costs of inclusion. A glossary defines common terms associated with inclusive early childhood education. (Contains 12 references.) (DB)