The aim of this thesis is to contribute to the knowledgebase of inclusion and inclusive education and to outline possible consequences that may arise from an educational ideology of inclusion. The thesis describes a potential dilemma that is both theoretical and practical. The dilemma consists of, on the one hand, a need of identification and categorisation of specific groups in society in order to allocate and redistribute available resources, while, on the other hand, there is a need of social recognition of diversity in educational settings in order to achieve social justice and parity of participation. The inclusion of pupils with physical disabilities in the school subject of physical education (PE) is used as a particular example to illustrate a general dilemma. The specific aims were: i) to describe and apply a theoretical framework of ‘social status’ as a possible means of resolving the dilemma (study I); ii) to study PE teachers’ attitudes toward inclusive physical education (studies II and III); and iii) using a case study, to explore the experience of physical education through the eyes of a pupil with a physical impairment and his parents, classmates, PE teachers and personal assistant (study IV). Results show that Swedish PE teachers at primary school level are positive to inclusive PE for pupils with physical disabilities. Factors found to contribute to these positive attitudes were adequate training in inclusive education strategies, supportive school environments and personal resources. In a systematic review of international research PE teachers, in general, were found to have ambivalent attitudes to inclusive PE. This ambivalence was found over cultural borders among the 1200 respondents covered in the 15 articles reviewed and may indicate a latent awareness of the dilemma. Previous experience of having taught PE to pupils with physical disabilities, together with proper education in inclusion, mediated a more positive attitude. The case study of a 10-year-old boy with physical disabilities and significant others in his educational life proved to be a signal example of successful inclusion. Honneth’s three levels of social recognition were used in the analysis. Social recognition at individual, legal and value dimensions is a prerequisite for achieving social justice in inclusive PE settings. Finally, these findings, taken together, indicate a need to address social recognition and redistribution demands simultaneously in order to meet goals of equitable education for pupils with physical disabilities in inclusive PE teaching. Societal (external) and individual factors need to be combined when addressing the issue of social justice in inclusive education. A model of social status, developed by Fraser (2001; 2003), used in conjunction with the notion of plural identities is suggested as a possible resolution to the dilemma described in the thesis.