This chapter seeks take part in an emerging research where religion is approached as a whole school endeavor. Previous research and policy recommendations typically focused on teaching about religion in school, but the accommodation of religious diversity in the wider school culture merits more attention. Based on observations in our multiple case studies, we discuss the multi-level governance of religious diversity in Finnish multi-faith schools with a particular focus on the challenges of religious literacy for educators. The three examples we present focus on the inclusion of Muslims in Finnish schools and in particular on the challenges for educator (1) in interpreting the distinction between religion and culture, (2) in recognizing and handling intra-religious diversity, and (3) in being aware of Protestant conceptions of religion and culture. A theme cutting across these examples is how they reflect the tendencies either to see different situations merely through the lens of religion (religionisation), or not to recognize the importance of religion at all (religion-blindness). We argue that religious literacy should be recognized and developed as a vital part of the intercultural competencies of educators.