The dominant discourse in accommodating the ethnic Chinese in Indonesia during Suharto’s regime was one of assimilation, which forcefully aimed to absorb this minority into the national body. However, continuous official discrimination towards the Chinese placed them in a paradoxical position that made them an easy target of racial and class hostility. The May 1998 anti-Chinese riots proved the failure of the assmilationist policy. The process of democratization has given rise to a proliferation of identity politics in postSuharto Indonesia. The policy of multiculturalism has been endorsed by Indonesia’s current power holders as a preferred approach to rebuilding the nation, consistent with the national motto: ‘Unity in Diversity’. This paper critically considers the politics of multiculturalism and its efficacy in managing cultural diversity and differences. It deploys the concept of hybridity to describe as well as analyze the complex identity politics of the ethnic Chinese in contemporary Indonesia.