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Interaction based on equality is a determining factor in an intercultural approach to mutual cross-border integration. States direct their policy vectors towards creating provisions for positive and constructive cooperation between people of different backgrounds and lifestyles with government institutions. The recognition and testing of policies and practices that promote intercultural interaction and inclusion by local governments are of particular importance in this context. The aim of the article was to identify and reveal current problems and the current state of regulation of intercultural communication and community participation in local governance in the European Union and Ukraine. Observation, analysis and survey methods were the main methodological tools. The study showed that the effective development of intercultural communication and community participation in local governance requires progress in the implementation of the overall strategies declared by the European Union. The adequacy and prospects of the intercultural cities network (ICC) are presented. Analysis of the survey of cities surveyed in the Intercultural Cities Index showed a high level of local government transformation and public participation in regional decision-making.