This paper maps out the challenges and responses to inclusive education in Sweden from a cultural/historical point of view. Core concepts that have bearing on inclusive education practices are discussed. The analysis incorporates varied materials. As the current Swedish political and educational discourses reflect contradictions and dilemmas among varied dimensions of the educational arena, the analysis has been conceptualized in terms of the assumption that policy and practice decisions involve dilemmas. Swedish social welfare/educational policy has traditionally been underpinned by a strong philosophy of universalism, equal entitlements of citizenship, comprehensiveness, and solidarity as an instrument to promote social inclusion and equality of resources. Within the past decades, however, Sweden has undergone a dramatic transformation. The changes are framed within neo-liberal philosophies such as devolution, market solutions, competition, "effectivity", and standardization, coupled with a proliferation of individual/parent choices for independent schools, all of which potentially work against the valuing of diversity, equity and inclusion. Marginalization and segregation of socially disadvantaged and ethnic minority groups has increased. Result and resource differences have widened among schools and municipalities and among pupils. Swedish efforts in the past to promote equity through a variety of educational policies have been fascinating. Those early educational policies, including the macro political agenda focused on the social welfare model, have helped to diminish the effects of differential social, cultural, and economic background on outcomes. This has come under threat. There is still some hope, however, of mitigating the situation through varied social and educational measures combined with an effective monitoring system and a stronger partnership and transparent working relationship between the central and local government systems. Research and follow-up are crucial in this process. (Contains 2 tables.)