Differentiated instruction (DI) is nothing new and is believed to be an effective research-based strategy to cater for learner diversity. Differentiation involves finding multiple ways to structure a lesson so that each student is provided with an opportunity to work at a moderately challenging level. Previous studies, however, found that teachers were not well prepared and insufficiently equipped with skills and knowledge about DI. In the recent Hong Kong curriculum reform, DI has been highlighted as one of the ways to catering to learner diversity. The purpose of the study is to examine in-service teachers' readiness for using DI strategies and perceived challenges in its implementation. Using a mixed-methods design, a questionnaire was used to investigate teachers' perceived readiness for and obstacles toward using DI strategies, as followed by semi-structured focus group interviews that were done to in-service teachers of two schools. Qualitative data as obtained from the interviews was used to explain the quantitative data. With the use of factor analysis, two factors were identified in the survey, including Factor 1 Teacher-centred approach and Factor 2 Student-centred approach. Findings indicated that teachers generally tended to be ready for using DI strategies; however, they were more ready for using teacher-centred approach. Three perceived obstacles toward DI were identified: class size and diversity, time, and understanding of teaching strategies. Implications for curriculum development, professional development and research directions will be discussed at the end of the paper.