With the demographics of American school children rapidly changing and the demographics of school psychologists remaining relatively unchanged, more than ever school psychologists are working within the cross-cultural zone. This means that they are working with students and families who are culturally different from them. It has become vital that school psychologists are multiculturally competent; however how this form of competence develops is relatively unknown. Grounded theory methodology was used in the current study to explore how early career school psychologists who work in diverse schools define multicultural competence and multicultural competence development. Results indicate that the participants felt that multicultural competence should largely focus on interpersonal relationships with students and families as well as self-awareness. Additionally, the participants felt that multicultural competence was dynamic as opposed to stagnant. With respect to multicultural competence development, the participants felt that their early career experiences contributed to this area of competence more than any other factor. The foundation of their multicultural competence was made up of a desire to work in a diverse setting as well as their background and exposure to different cultures. They felt that their graduate school classes contributed to this foundation. Personal experiences also contributed to multicultural competence, but were not as significant as professional experiences.