This paper explores the ambiguous position and identity of Arab migrants in Australia in the era of globalization. It argues that while migration readily confers Australian citizenship rights it does not signify cultural equality as espoused in the rhetoric of multiculturalism. The paper examines the way Arab cultural identities are articulated with respect to the multicultural identities of the city, ‘white’ Australian national identity and transnational diasporic and religious identities. It argues that Arab ethnic and diasporic identities have become inextricably tied up with globally-mediated events and images and with transnational discourses on difference and danger. The paper argues that the Australian Arab migrant experience provides insights into the more general Arab diasporic experience.