The paper uses primary and secondary data from Bombay to explore the conditions under which a deeply cosmopolitan space was transformed into a space of public fear. Bombay is a city-region with a population now approaching 15 million. In the early 1990's it was rocked by a series of major riots directed against its Muslim population, in the context of a long-term history of substantial economic, spatial, social and cultural interdependence between many ethnic communities. The paper will use the major ethnic riots of 1992-93 to tease out the relations between global economic changes and national political shifts which created implosive local contradictions and enabled ethnic terror against Bombay's Muslims, placing them outside the routine protections and presumptions of citizenship. The broader policy question underlying the paper is about the conditions under which SUSTAINABLE DIVERSITY can be built into urban life, so that CITIES and CITIZENSHIP can reinforce, rather than erode, one another.