This study reviewed current issues in preparing qualified teachers for increasing diverse student populations in the U.S. and in other multicultural and multiethnic countries. Based on the framework of community-based and multicultural teacher education, this literature review paper analyzed issues and problems existed in the current curriculum, content, and practicum in traditional teacher education programs in addressing cultural knowledge and competence of preparing pre-service teachers in a multicultural society. Drawing from implications from community-based teacher education, this paper proposed several suggested strategies to reform traditional teacher education programs to meet the needs from multicultural and multiracial student populations and instructional context.