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Purpose The overarching purpose of this paper is to explore the transformation of intercultural education in Cyprus in the context of European integration. More specifically, it indicates the ways in which intercultural policy has been formed by complex and often counteractive influences. The analysis draws upon policy documents collected from the Ministry of Education and Culture (MEC) and interviews carried out with Cypriot policy-makers. Europe has come to play an important role in the development of Cypriot intercultural policy by becoming a mechanism of pressure for educational change. Through monitoring processes, Europe has indicated problems deriving from the culturally pluralistic character of the Cypriot society that should be addressed by national policies. In this context, Cyprus has initiated an educational reform, including a reform of the national curriculum towards a more intercultural orientation. Nonetheless, the findings of this research assert that there is a gap between policy rhetoric and practice. Design/methodology/approach This study reports on an analysis of the policy dynamics influencing intercultural education in the Greek–Cypriot context. The authors aim to examine the context and content of educational policies and directives which have been initiated and/or developed at the Greek–Cypriot level. To this end, the authors drew upon policy documentary and data derived from interviews conducted with Greek–Cypriot policy-makers and education officers. Findings It appears that intercultural education became an important part of the state’s rhetoric. Cyprus has initiated an educational reform, including a reform of the national curriculum towards a more intercultural orientation. Therefore, since 2008, the state and particularly the MEC have replaced the previously used term of multicultural education with the rhetoric of intercultural education and inclusion as the preferable educational responses to immigration. Research limitations/implications The findings of this study suggest that the development of intercultural education requires the re-conceptualisation and re-structuring of the Cypriot educational system and schooling. The state should adopt a balanced governance model between school autonomy and centralised management. Practical implications This paper can help schools and teachers to improve their intercultural education approach. Social implications The findings could be helpful for improving the intercultural education policy in Cyprus. Originality/value These research finding are the first that deal with intercultural education policy in Cyprus.