If multicultural education is to extend its knowledge base beyond previous incarnations of learning and teaching about “saris, somosas and steelbands” (Modood, 2007, p. 15), then fresh intellectual resources are necessary. As a way forward, this chapter proposes a project around the notion of ‘cosmopolitan capabilities’ for transnational knowledge workers (Rizvi, 2008) of the twenty-first century. The proposition is advanced with cognizance of the problematical nature of both cosmopolitanism (Appiah, 2006; Beck, 2006; Fine, 2009; Sen, 2006) and the capability approach when used in education (Harreveld & Singh, 2007; Nussbaum, 2009; Saito, 2003). Contextually, the case is situated at the intersection of local and global concerns around social, economic and political practices that impact teacher education policy and practices in Australia. A revitalized teacher education is fundamental to learning and teaching about inter-cultural and intra-cultural diversities that are no longer aligned solely to the requirements of nation states. Rather, such knowledge has the potential to become cosmopolitan with a focus on developing capabilities to understand the dynamics of local-global economic and political relations, civil rights and responsibilities when living in an immigrant country such as Australia. Accordingly, the case for cosmopolitan capabilities utilizes evidence that illustrates the challenges inherent in teacher education in an era of global interdependence and the fragility of its economic, political and social institutions.