In the interests of forging the nation state, Japanese leaders in the Meiji period (1867-1912) created a national consciousness based on the ancient Japanese texts Kojiki (Records of Ancient Matters), written in CE 712, and the Nihongi (Chronicles of Japan), written in CE 720. They were originally used as the ideological foundations of the “Oseifukko” (Restoration) which justified the abolition of the shogunate as well as regency rule, and the revival of imperial rule for the first time in about a thousand years. Consequently, and from the middle of the Meiji period until the end of World War II, the ideology of Japan as a multi-ethnic nation including the Yamato (Tenson), Izumo, Emishi, Kumaso, Hayato, Ainu and other groups was mainstream. However, after 1945, and especially during the 1960s as Japan entered a period of accelerated economic development (which resulted in dramatic changes in social structure and popular consciousness), references to Japan as a “homogenous country” and “homogenous society” emerged and became dominant. This shift was of great significance for conceptions of national identity of the Japanese people and their recognition of national or ethnic groups. In this article, I discuss the deconstruction of the illusion of a homogeneous society (also known as the “fusion of ethnic groups” or “melting pot” theory in Japan), and the reconstruction of a multi-ethnic identity comfortable with its internal diversity, and able to acknowledge groups such as the Izumo which are different in terms of their historical origins, cultures and language from the majority Yamato people.