Many children and adolescents today are growing up in highly diverse and inequitable societies. Against this background, educators and educational institutions have suggested that adolescents need to develop new skills, such as the abilities to constructively engage with cultural diversity (as in intercultural competence) as well as with social inequity (as in critical consciousness). Schools in societies of immigration have the potential to be natural arenas for fostering intercultural competence and critical consciousness. For example, schools may foster opportunities for contact between students with different cultural identities, ethnic affiliations, or migration histories. Moreover, schools may encourage students to critically reflect on cultural diversity and social inequity in society. The present chapter focuses on the specific socio-historical context of Germany and draws on theories and empirical findings from education and psychology to show how adolescents attending culturally diverse schools in Germany may acquire intercultural competence and critical consciousness. The chapter concludes with suggestions for how schools may encourage a nuanced engagement with cultural diversity and social inequity.