The present study discusses the concept of competence in teacher education concerned with the preparation of teachers to deal with cultural diversity, building on a critical theoretical intercultural perspective. A parallel between Brazil and the UK arguably shows that despite considerable differences, both countries share the challenges imposed on their educational systems by the multicultural nature of their societies. The evidence of the role of teachers'' perceptions and assumptions in the perpetration of education inequality in both countries is presented, and the contributions of the intercultural approach to change the situation is discussed. A case study undertaken in a higher teacher education institution in the UK highlighted the nature of some of the constraints for the development of intercultural sensitivity in the delivery of educational theory and in the school experience component. Data showed the institutional hierarchical culture was a relevant factor detrimental to the development of competence in an intercultural perspective. The extent to which such a factor is common in teacher education institutions would need to be addressed in further research in the area.