With the world-wide adoption of the philosophy of inclusion for the education of all students, a shift in thinking has occurred which sees schools as meeting a broad range of educational and social needs in regular classrooms, as opposed to segregated specialist expertise outside of the classroom. The discourse of inclusion extends to incorporate many different groups, including students with difficulties in learning, students with disabilities, and generally students who are disadvantaged in that they cannot access the curriculum effectively. The focus of this chapter is on advocating the use of a capability approach (Sen, 1992) as a framework to enhance students’ educational outcomes. This approach focuses on an individual’s capability to achieve rather than students being defined by their origin. This chapter uses the concept of ‘figured worlds’ (Holland et al., 1998) to explore how student identity develops. The chapter emphasises the need for teachers to be aware of what learning is possible and the learning identities offered in an inclusive learning environment.