The current practice of the least restrictive environment (LRE) policy in physical education (PE) settings is not well understood. The purpose of this study was to explore how PE and adapted physical education (APE) teachers make placement decisions and what factors impact those practices. Qualitative data were collected via survey and follow-up interviews with 78 (30 PE, 48 APE) and 12 (five PE, seven APE) teachers, respectively. Through a qualitative description design, four themes emerged: (a) the importance and pitfalls of teacher education, (b) APE teachers involved, PE teachers not, (c) lack of resources challenge LRE implementation and (d) demanding duties exacerbated by perceived marginalization. Findings suggest that the teacher education programs did not provide enough real-world experience in making LRE decisions. Further, PE and APE teachers felt that marginalization prevented the appropriate practice of the special education policy.