Inclusion challenges teachers to value and accept diversity, to collaborate with colleagues in all aspects of teaching, and to use instructional practices that have proven efficacy in heterogeneous classrooms (Lilly, 1998; Sapon-Shevin, 1990; Villa & Thousand, 2000). As a result of legal mandates and the trend towards inclusive placements, inquiry into effective practices for students with disabilities in physical education has begun to materialize (Hodge, Ammah, Cassebolt, Lamaster & O'Sullivan, 2004; LaMaster, Gall, Kinchin and Siedentop, 1998; Vogler, Koruna, and Romance, 2000). The purpose of this study was to investigate teacher experience and practices that contribute to effective inclusionary teaching. One elementary physical education teacher in an inclusive school was selected as a subject of investigation because of her extensive teaching experience with students who have severe disabilities. Two, third grade physical education classes were observed, twice a week, over a sixteen-week period. The first included a student with cerebral palsy and a visual impairment. The second included a student with significant language based challenges affecting all academic areas. Data were collected from four primary sources: interviews, observations, journals and document review. In-depth interviews were conducted with the physical education teacher three times over the course of the semester at the beginning, middle and end of the research. Informal interviews were conducted prior to and at the end of each class to clarify learning goals and instructional objectives. Field notes were recorded during 30 classroom observations using the Schatzman & Strauss (1973) system of organizing notes. Documents collected for review included lesson plans, assessments and curricular units. The physical education teacher and the researcher also recorded personal thoughts in journals which were analyzed for review along with other documents. Boyzaitis's (1998) five-step process was utilized in the analysis as a method of integrating categories while grounding theory (Strauss & Corbin, 1990). Results indicated two primary themes: sensitivity to difference and an ecological acuity that informed curricular and instructional decisions. In particular, the teacher's use of cooperative learning encouraged students to learn physical skills as they worked together in small groups. Recommendations from this study include in-service training and support on best inclusionary practices for physcial education teachers. PETE programs are also encouraged to adopt an infusion approach that embeds disability throughout the curriculum at the undergraduate level. Keyword(s): adapted physical activity, curriculum development, professional development