This study investigates how social interaction affects newly arrived pupils’ views on their study situation in the Swedish educational system. The aim is to give a contribution to the discussion on the notion of including “the Other” in educational practice in multicultural schools. Semi-structured group interviews were conducted to explore how the intercultural perspective and the theory of inclusion can be used to explain the dynamics of social interaction. The main research questions were: how did social interaction take place in preparatory class and in regular class? In what way did social interaction affect the transitional period from preparatory class to regular class? Did social interaction have consequences for the informants as learners? The results show that newly arrived pupils had the opportunity to develop intercultural interaction skills in the preparatory class. Meanwhile, this organization meant educational exclusion, which might have contributed to the stress and anxiety they experienced later in regular class. The transitional period was problematic, since students had to struggle in two aspects. First, they had to catch up in many subjects though no significant measures were taken to their linguistic ability and former school experiences. Secondly, they had to assert their place in an environment with dysfunctional social interaction between some teachers and pupils in regular class. The conclusion is that schools have a dilemma in catering for both social and educational inclusion simultaneously. Despite this, many pupils expressed satisfaction with their school performance. This suggests that intercultural interaction skills, crucial for the pupils’ development, can be developed in the preparatory class. Schools need to implement an intercultural perspective in the educational organization and planning to include every newly arrived pupil. This calls for a holistic approach in pedagogic and social interaction between everyone involved.