This study explores the conditions that limit social participation for children with physical disabilities, and in particular, how school segregation practices affect participation in formal and informal after-school activities. In a sample of 491 children, to varying degrees, a majority of the children were taken out of ordinary classroom education and tutored in smaller groups or with one single teacher or assistant, or attended special schools. Results showed that the more the child was segregated from ordinary classroom education, the lower were his or her chances of seeing friends or participating in after-school formal group activities. In addition to parent’s income and educational attainments, various measures of the severity of the child’s disability significantly affected social participation. In particular, parental background affected the chances of participation in formal, organised activities. However, these factors alone could not account for the empirically strong association between segregation practices and social participation. While probably not intentional, segregation practices effectively limit or even prevent children with physical disabilities from engaging in a wider social setting. The very same welfare state practices responsible for integrating children maintain institutional arrangements that effectively exclude children with disabilities from participating in mainstream society.