Abstract The multicultural Cypriot society is called upon to face its increasing diversity and manage the relations between its inhabitants (locals and immigrants) for peaceful coexistence. The present study compared acculturation processes of Ιmmigrant students to those of local primary school students aged 11–12 years regarding social adjustment, ethnic identity and self-esteem. Results showed a stronger orientation toward their Country of Origin for both Cypriot and Ιmmigrant students regardless of the nationality of immigrants’. Furthermore, Cypriots and Ιmmigrant students had more group contact with their compatriots than children from other countries. Lastly, the strategies of acculturation and the stages of forming ethnic identity were correlated to Ιmmigrants’ self-esteem levels. The findings highlight the need for new directions in educational policies in the country. The educational system must become flexible and effectively adaptable to the recent changes to form the foundation of cultural coexistence of all the island’s inhabitants, ensuring social cohesion.