Recent decades have witnessed a change in European governments' policies from benign neglect to active management of religious diversity, where Islam is often seen as the most challenging religion for the European social order. However, the ways in which this 'management' is justified and undertaken varies from country to country and depends on the situation at hand. This paper will take up the issue of Islamic education in Finland and Ireland, where it is incorporated into the public school system with the state taking an active role in order to control how Islam is taught. The main argument of this article is that the 'management' of Islamic education in both of these countries is ridden with contradictions arising from the difficulty of balancing between an emphasis on particular national traditions, on the one hand, and public policies concerning religious diversity, on the other. Theoretically, the article will employ the perspective of multilevel governance in relation to religious diversity, which helps to widen the analytical lens from regarding the state as a primary explanatory factor to examining different agents of the civil society.