When the Ethiopian state was reorganized as an ethnic federation in the 1990s, both ethnicity and governance experienced the impact of the change. Most importantly, ethnicity became the key instrument regarding entitlement, representation and state organization. For the larger ethnic groups, fitting into the new ethno-federal structure has been relatively straightforward. In contrast, ethnic federalism has necessitated a renegotiation of identity and of statehood among several smaller communities that straddle larger ethnic groups. It has also led to the reconfiguration of centre–periphery relations. This contribution discusses how the federal restructuring of Ethiopia with the aim of matching ethnic and political boundaries led to renegotiation of identity, statehood and centre–periphery relations among several Somali and Oromo clans that share considerable ethno-linguistic affinities.