Research has provided insight into ideas, agents and patterns of inequality associated with Islamophobia. Yet, we know less about why anti-Muslim racism is so virulent and persistent today. Focusing on post-unification Germany, we explore the broader function Islamophobia fulfils for society. We draw on a discourse analysis of statements by four public figures, the publicists Monika Maron and Alice Schwarzer, and the politicians Vera Lengsfeld and Beatrix von Storch; two of them are from Germany’s former East, and the other two from the former West. We found little evidence of specific regional ‘flavours’ of anti-Muslim racism, but noted that the speakers’ diverging positionality in re-unified Germany shapes their Islamophobic agitation. Our analysis shows how ‘old’ and ‘new’ Germans distinctly participate in re-creating western identities as the unmarked norm. Anti-Muslim racism, we argue, plays an important role in everyday discursive acts of nation-building, and assists in justifying multi-layered patterns of stratification. Outward projections onto an ‘Other’, the ‘enemy within’, fulfil a key function: the integration of a highly polarized society, at least on the symbolic level. The collective in need of integration, our analysis suggests, may therefore not necessarily be the one that is the main target of such efforts.