This chapter sets out to examine how contextual and social factors and educational policy may impact the agency of teachers. This is built on an Icelandic case in which a development project, titled Beginning Literacy (BL), is taken as an example of how teachers may be empowered, through job-embedded professional development, as agents of an implemented curriculum in which professional noticing paves the way to child-centred pedagogies and inclusive literacy education that is responsive to students’ cultural and social capital and personal identity. BL is put up against the policy discourse put forward to clear the ground for a national initiative on literacy, launched by the Minister of Education and Science in 2015, in which significantly different conceptions of literacy are reflected in an emphasis on setting yearly standards for proficiency and applying screening tests to enable the comparison of individual students with the standards. The main conclusion of the chapter is that policy-informed initiatives can shape what happens in classrooms by empowering teachers to take an agentic stance to support students’ learning or by the same token, undermining such a stance by restricting teachers’ agency by covert or overt demands of measurable learning outcomes on national or standardised screening tests.