This chapter contends that if schools employ a socially inclusive framework with which to encourage and enable active participation for all students, a positive attitude toward active citizenship can be nurtured. It argues that socially inclusive school environments should be underpinned by the inclusion of core curriculum which addresses multiculturalism, social diversity and positive identity development. Australian schools have an important role to play in shaping of young people's identities and in development of active citizenship in an increasingly multicultural and globalised society. The Australian educational system has a history of some types of inclusion like Civics and Citizenship Education, while many faith schools have also offered, and continue to offer, values education. Active citizenship values are reflected in social inclusion agenda's vision for all Australians to engage by connecting with people and using their local community's resources. Social exclusion via racism is played out in the school yard on reasonably regular basis, eroding victims' sense of belonging and self.