French republican universalism – expressed most strongly in the principle and practice of laïcité– and multiculturalism have constituted opposite poles on questions of citizenship and integration. The report of the Stasi Commission on laïcité on 11 December 2003 and the following legislation on the donning of religious symbols in French public schools have once again, spurred debates over the meanings and practices of laïcité. The report and the law have been interpreted in different ways. Some have presented them as a reaffirmation of a historically constituted laïcité under new circumstances, others as a divergence from the real problems of racism, unemployment and gender inequality. In this article, I offer an alternative reading by supplementing a critical reading of the report with an analysis of its historical and immediate institutional context. I evaluate the Stasi Report in its immediate context of institutional change, and in the historical context of selected developments concerning laïcité since the 1905 law separating churches and State. I argue that the Stasi Report marks a fundamental break with French republican universalism, and I show that this break occurred contemporaneously with key gestures of multiculturalism: the establishment of the French Muslim Council and the creation of Muslim high schools under contract with the French state. This double movement to narrow the boundaries of laïcité, and for the state to expand the boundaries of identity-specific, Muslim public institutions and private schooling constitutes a reorganization of the public sphere in France which qualifies as a move towards multiculturalism.