In Northern Ireland, where the majority of children are educated at schools attended mainly by coreligionists, the debate concerning the role of schools in perpetuating intergroup hostilities has recently been reignited. Against questions regarding the efficacy of community relations policy in education, the research reported in this paper employs qualitative methods to examine social identity and intergroup attitudes amongst children attending a state controlled Protestant school and the school's response to dealing with issues of diversity and difference. Findings suggest a relationship between ethnic isolation experienced by children and negative intergroup social attitudes and the discussion focuses on issues germane to the separateness of the school that are likely to contribute to strong "own" group bias, stereotyping and prejudice. The implication of the school's separate status for its engagement with a policy framework for relationship building is also considered. The paper concludes with some policy reflections that are likely to have resonance beyond Northern Ireland.