This paper aims to explore aspects of transnational identity formation among young Muslims in three Western countries, Denmark, Sweden and the United States. The thesis is that, on the one hand, such transnational identity formations are indeed taking place, and, on the other, they are continuously effected by aspects of the local and the contextual, and in particular by the conditions and legislation of the host nation-state. The process of transnational identity formation is described according to four overall conditions and themes: (1) visibility and aesthetics; (2) choice; (3) transnationalism; and (4) social ethics. These themes play significant roles on an overall transnational level, but are continuously 'localized', formulated and lived according to the context in which Muslims actually live. In the concluding section, the article discusses the implications of the dynamic field of transnational/national Muslim identity formations for the definition of a Muslim diaspora, and raises the question of whether we can at all talk about religious diasporas, and how we may do so on the basis of myth and politicized identities.