Background: The existence of many conflicted cities like Jerusalem creates a need for intercultural professional development (PD) for teachers. It is important to understand what teachers learn from their participation in such programs and how they are affected personally and professionally by their encounters with the other. The current study examines teachers' intercultural experiences in Teachers' Lounge (TL), a Jerusalem-based PD program that deals with the contextual challenges of living and teaching in a conflicted city. Purpose: By examining the learning and experience of teacher participants in a PD program in a conflicted city, this study develops a grounded theory of the "learned curriculum." It thus fills analytic and theoretical gaps in the existing literature between the stated aims of intercultural PD programs and the "learned curriculum" of such programs. Research Design: The study is a qualitative analysis that triangulates interviews, participant observations, and written materials. It uses several sources of data, which were all analyzed through a process of open coding. Codes were created and then divided into categories and domains according to their areas of learning. A grounded theory of a conceptual framework was developed by generalizing the emerging themes and categories. Findings: The study terms this new conceptual framework Teachers' Local Intercultural Competence (TLIC). This framework organizes the areas of teachers' learning around four domains of outcomes: contextual knowledge, self-awareness, pedagogical implications, and professional identity and community. Each domain represents the teachers' ability to recognize and create links between the larger social and political challenges of living in a conflicted city, and their own values and educational practices. Conclusion: This study demonstrates the potential of PD programs to develop teachers' sociopolitical awareness of their professional identity and practice in a conflicted city like Jerusalem. It shows the power of the personal encounter, the content of the context, and the connection between the professional and personal for the development of TLIC and for bringing the other into the scope of the educational practice. Future studies can use this framework to explore the pedagogy of such intercultural programs and examine their long-term impact on participants.