Trainees with problems of professional competence (TPPC) present trainers with unique challenges. When TPPC situations include diversity issues, the complexity of such challenges increases. Although attention to such intersections is important, little is known about what influences faculty thinking about diversity issues when trainee competence problems are identified. The authors analyzed 22 faculty interviews using grounded theory to explore contextual influences on faculty interactions. Participants described program commitments to diversity conversations, consultations, and examination of biases as important positive influences. Participants described historic conflicts (e.g., interpersonal and programwide) and within-faculty differences (e.g., differences in multicultural training, assumptions about diversity-related conflict) that made faculty interactions more difficult. New instances of competence problems that involved differences in opinion about the influence of diversity variables exacerbated existing conflicts and created new tensions among faculty. Implications for training and research are discussed.