This article examines findings from a Scottish Social Innovation Fund project carried out in an after-school club known as "The Studio." Researchers worked alongside artists to engage young people situated within their communities to challenge xenophobic discourses through the creation of positive narratives developed through story and arts-based activities. The work used the "deep hang out theory" to generate a complex account of how the participants mediated the cultural tools surrounding them to produce a community text. Through engaging in an arts-based process, the young writers and illustrators developed a sense of belonging within their communities, taking an active, engaged stance as literacy producers of texts that challenged xenophobic discourses. The lessons learned in this informal space are of relevance across contexts where young people wish to engage in creating positive narratives of community cohesion.