Few social issues cover so many various areas of society and the social sciences as the ‘headscarf affair’ in France. The ‘affair’ involves national history, the place of religion, the principle of laïcité (France’s form of secularism) and its limits as well as the role of schools in ‘assimilating’ immigrants’ children. It leads to the question of integration of Muslim and other immigrants, and Islam as a culture, religion and as a political force in and beyond its countries of origin. The arguments relate to moral principles such as tolerance, the right to difference, individual liberty, religious freedom, human rights and especially the emancipation of women and equality of the sexes. And finally, the issue leads to questions about the effects of multiculturalism in practice, the re-establishment of public order, the redefinition of the social contract and of equal citizenship. The debate on this issue and the underlying phenomenon it addresses are part of the globalization that leads to identity anxiety within both states and communities, which now compete for the loyalty and allegiance of their members within the same geographical space. Therefore one of the important aspects of multiculturalism is related to the transnational scope of community identification, which gives new impetus to expressions of identity within and beyond national territories (Kastoryano, 2002a).