The Pacific region is one of the most culturally diverse areas of the world; societies within this region are also culturally diverse. For both these reasons, intercultural relations and acculturation phenomena are at the forefront of psychological interests there. This paper first situates these phenomena in their ecological and cultural contexts, in which human diversity and individual behaviour can be examined and understood as adaptations to these contexts. Then the notion of differentiation in psychological and sociocultural phenomena is discussed, linking them to the concept of social capital. The processes involved in acculturation and intercultural relations are then described, and linked to the concept of differentiation. The argument is presented (with an empirical example from research with immigrant youth) that the more differentiated are a person's psychological life, as well as their social and cultural engagements, then the better adapted they are to living interculturally. Suggestions for policy and programme development and implementation are made: these include advancing the multicultural way of living together, and of accepting the need for mutual accommodation.