In Gibraltar one often hears that it is “an example to the world” because a good harmony prevails among the great variety of ethnic and religious groups coexisting in this tiny British Overseas Territory on the southern tip of the Iberian Peninsula. Over the last century, religious tolerance and ethnic diversity became two important identity markers of Gibraltar’s nationhood. This paper analyses the political origins and instrumentalisation of this multicultural discourse, which emerged in the shadows of the diplomatic dispute between the UK and Spain over Gibraltar’s sovereignty. We argue that, from the 1940s onwards, Gibraltar’s political authorities have emphasised the multi-ethnic composition of the population to demonstrate a unique national identity, while simultaneously downplaying Spanish cultural influence over the territory. Today, many Gibraltarians have embraced this multicultural discourse as a key component of the national narrative. This paper concludes that multiculturalism in Gibraltar, although largely internalised, is not sui generis but part of a conscious effort since World War II to create an identity that it is different to a Spanish one.