Linguistic diversity is a common phenomenon in urban Nepalese societies. However, Nepalese educational system has not adapted this reality very well. Therefore, considering the linguistic landscape of the multilingual city in Kathmandu, this study focuses on the linguistic and cultural diversity in multilingual school space of public education system. The purpose of this study was to explore how the English language teachers address the issue of students’ linguistic diversity in English as a medium of instruction (EMI) language policy classrooms, whether they take this as a challenge of teaching or chance for learning. Employing a phenomenological design of qualitative research, three English language teachers were interviewed to collect information for this study. Their audio recorded interviews were transcribed, coded and then analyzed and interpreted using a thematic approach linking with relevant theories. The findings indicate that linguistic diversity in the English classrooms can be a valuable resource for learning and developing effective intercultural competence in the learners to cope with culturally diverse social contexts. Though linguistic diversity has become a challenge of teaching for English language teachers, it can be changed into an opportunity for learning through intercultural awareness. EMI language policy of public schools has become a barrier to change multilingualism as a resource for learning.