This study investigates power relations in a small city in southern Sweden. It is a city where there have been radical social changes in the population structure due to a major inflow of immigrants. The social situation can best be described as filled with tension between different groups. In relation to the tension there is a strong and dominant narrative about “us” and “them”, relating to the categories “Swedes” and “immigrants”. The study aims to explore how children actively use and reformulate the narrative and the power relations within it. The point of departure is the assumption that human beings are embedded in figurations (families, social class, ethnic groups, nations etc.) containing different power ratios that are transferred from one generation to another (Elias 2009). Socialization is thus central in the transmission of power ratios, as children acquire adult standards of behavior and social norms. However, children are from, childhood sociology’s point of view, also active agents involved in creating and influencing their own and others’ lives, which implies that socialization is not equal to adaptation and internalization, but also to children’s negotiation, sharing and creation of culture (Allison, Jenks and Prout 1998, Corsaro 2005). In the study the children’s contribution to reproduction and reformulation, in relation to the narrative of “us” and “them”, is in line with William Corsaro’s (2005) concept of interpretative reproduction. The term interpretative captures children’s participation in their own unique peer cultures by creatively taking information from the adult world to address their own peer concerns, while the term reproduction captures the idea that children not only internalize society and culture, but actively contribute to cultural production and change.