With globalization, increased mobility of families, and the resultant changes to the social and cultural profiles of many countries, early childhood education is in an exciting, challenging, and, in some ways, uncomfortable position. For many years, teachers have been influenced by developmentalists as they have tried to respond to the diverse needs of individual children. They have been concerned with planning and implementing developmentally appropriate curriculum. While these goals are still important, teachers now face some harder questions in relation to children's sociocultural contexts and the many societal influences impinging on their lives and learning. Taking literacy learning and teaching in Australia as its focus, this article examines the complexities of the contemporary contexts of teaching, explores what teachers know about the challenges of responding to sociocultural diversity, and suggests some pedagogical responses.