Iceland has seen rapidly changing demographics in recent years as a result of growing immigration to the country. This is reflected in the education system where children speak altogether around 100 languages. This qualitative research aims at exploring the language policies and practices of diverse immigrant families and their cooperation with their children's preschools. The theoretical framework includes family language policy and linguistically appropriate educational practices. Data was collected in the spring and autumn of 2020 and included semi-structured interviews with parents in six families, principals and teachers in their children's two preschools. The findings indicate that the parents have diverse language policies and different opinions on the importance of their heritage languages, Icelandic and English. While the preschools in the study emphasize linguistically appropriate approaches, these are not well developed. Other challenges include the lack of dialogue between the preschools and the families to support the children's multilingualism.