In multi-ethnic Malaysia, the Malays are the politically dominant group, although they lag behind the Chinese and Indians in terms of the average income. Their dominant position explains why the question of Malay identity is an issue of national importance. This paper argues that the meaning of being Malay has gradually been changed, stressing Islamic religion more than language and customs. It implies that the Malays are more conscious of being part of the "ummah", the worldwide Islamic community, and that Indonesians are increasingly seen as foreign Islamic nationals, just as Bangladeshi and Moro-Filipinos, and not so much as Malay co-ethnics. Being part of the "ummah", however, does not mean that the national borders are open for co-believers. In fact, Malaysian public opinion and policies concerning immigration has undergone a shift in emphasis and rhetoric. During the first decades after Independence, the government at the time welcomed Indonesian immigrants, who were considered as strengthening the position of the Malay. This led to a relatively unrestricted policy towards Indonesian immigration. However, due to massive clandestine immigration, intensifying popular dissent towards immigrant labour, the Asian economic crisis of 1997/98, and the less privileged position of the Indonesians in terms of identity identification, public discourse has changed. The Government now stresses nationality or "Malaysianess" in its migration policy. Fuelled by economic pressures, rising xenophobia and the stigmatisation of immigrants, Malaysia's policy now emphasises nationality in its official rhetoric, translating it into a greater assertion of the sovereign nation-state and national borders. Copyright Royal Dutch Geographical Society 2002.