Existing research on inclusion and exclusion processes in physical education (PE) has particularly focused on exclusion from PE as something being done to students and attributed to specific social categories such as (female) gender, (low) physical skills or (minority) ethnic background. This article aims to develop a social-relational perspective on inclusion and exclusion processes defined as students’ participation or non-participation in PE interpreted as a community of practice. In so doing, the article examines how students’ experiences of participation and non-participation in PE are influenced by complex interactions within the group of students and in negotiations with teachers about the values and practices of PE. The article is based on an embedded single-case study carried out over the course of 6 months through weekly observations of PE classes in a multi-ethnic school, as well as focus group interviews with students and teachers. Using Etienne Wenger’s conceptual tools, we show that a student’s degree of participation in the community of practice of PE-classes is closely related to the legitimacy of the student and the extent to which the student experiences PE as meaningful. Some students were excluded from PE because they did not have the physical skills and social relations necessary to gain legitimacy from other students. Others chose not to participate because PE was not meaningful to them. This latter type of non-participation from students who experienced lacking meaningfulness was evident in PE classes that had little transfer value and limited prospect for students to develop the knowledge, skills or the understanding necessary to move towards full participation in the classes. Thus, the article argues that an understanding of the variety in students’ participation or non-participation is important not only in terms of how we talk about students as passive victims or active agents, but also in terms of future intervention aimed at promoting inclusion processes in PE.