In recent years religious pluralization has become a significant policy issue in Western societies as a result of a new awareness of religion and of religious minorities articulating themselves and becoming more visible. The article explores the variety of social and political reactions to religious diversity in urban areas and in doing so it brings together theoretical concepts of political and cultural sociology. The notion of diversity governance as joint endeavour of state and societal actors managing societies is linked to the notion of boundary work as interplay of state and/or societal actors maintaining or modifying boundaries between religious traditions. Based on two case studies the article illustrates two idealtypical settings of diversity governance: The first case from the German Ruhr Area stands for a bottom-up approach which is based on civic self-organization of interreligious activities whereas the second case from the Swiss canton of Lucerne exhibits a model of top-down governance based on state interventions in religious instruction at schools. Drawing on semi-structured interviews and participant observation the authors show how different governance settings shape the construction and blurring of boundaries in the religious field. Both approaches operate differently when incorporating religious diversity and rendering former homogenous notions of we-groups more heterogeneous. Despite of the approaches initial aim of inclusion, patterns of exclusion are equally reproduced since the idea of 'legitimate religion' rooted in Christian majority culture is present.