This study explores how differentiated instruction (DI) is planned, implemented and evaluated in a Swedish Year 1 classroom that includes two gifted students. Applying a focused ethnographic mixed-methods design, it combines qualitative data with structured observations using the Classroom Observation Scales-Revised (COS-R). Thematic analysis was structured around three themes: planning for DI involving anticipation and collaboration (e.g. adjusting to students' readiness), implementing DI through a responsive and flexible practices (e.g. real-time adaptations), and evaluating DI through ongoing reflection (e.g. formative assessment in classroom interactions). This supported both academic growth and social inclusion. COS-R scores indicated strengths in curriculum planning (M = 2.50) and creative thinking (M = 2.50), and areas for improvement in critical thinking (M = 1.50) and research strategies (M = 1.13). The study shows how DI can be integrated into everyday classroom practice in ways that respond to student diversity. It contributes practice-relevant insights into how DI is understood, enacted and experienced in inclusive classrooms, and highlights professional judgement, responsiveness and teacher self-reflection as central to differentiated and inclusive teaching.