Under pressure from crowded immigration detention centres and an election commitment to remove children from detention, in 2010 the Australian government opened a low security immigration detention facility for families and children in the Adelaide Hills. Children from this alternative place of detention (APOD) attend nine local schools. However, many local residents feared their enrolment would create conflict, reduce educational outcomes for local students, and overburden teachers and school resources. To answer these concerns we conducted an ethnography of the schools and interviewed school teachers, principals, parents, the education managers in the Department of Immigration and Citizenship (DIAC) and the Department of Education and Children’s Services (DECS). This paper reports our findings on the impacts of the new arrivals on school finances, teacher time and resources, the local children, and the broader Hills community. As did previous quantitative studies, we found no negative effects. Rather, the new arrivals created a newly enriched learning environment and social experiences. The schools also played an integral role in changing the initially hostile community attitudes towards asylum seekers. Our qualitative research approach allowed us to explore factors that created this outcome. We found that the absence of negative impacts was the result of the funding for specialised support staff, the social justice orientation of the school’s leaders and staff, and a school-wide commitment to values of inclusivity and diversity. This research provides further empirical evidence on the impacts of immigration on education, increases our understanding of the factors that mediate these impacts, and provides a useful case study for schools that teach asylum seeker children.