EU programme documents designed to influence the social policies of the member states are filled with concepts of social exclusion and social inclusion. This paper aims to clarify these concepts as they are employed in academic and public policy discourse and to discuss the societal function of this discourse and the impact of the European agenda of social inclusion. The authors show that although concepts of social exclusion and social inclusion are far from straightforward in meaning, their influence on public policy discourse and agenda is evident. The reason is that they redirect social policy towards a multidimensional approach, towards balancing rights and obligations, and towards more complex but also local and individualised policies, though the corresponding discourse bears the normative features of a social 'vision'. The EU's social policy agenda exhibits aspirations towards and some potential for achieving real policy change. On the other hand, there are reservations about its true impact. In this respect, the specific societal and political context of its implementation plays a crucial role.