In many countries, multicultural citizenship has run into difficulties. The relation between immigrant groups and the larger society has come to the fore, and different strategies have been proposed for how to better integrate immigrants in their new surroundings. This paper focuses on how ethnic identities and cultures are maintained and transformed in diasporic situations, namely though music. Through a systematic review of academic articles published in the last 20 years, this paper investigates the role of music in cultural identity formation among ethnic groups. The review finds that the literature stresses four particular areas: context (the diasporic situation), space for recognition and resistance, time and memory to allow identity maintenance and transformation, and politics (social subordination or resistance). The paper concludes by stressing the importance of further studies on identity formation in diaspora, not least about diasporic consciousness as a resource and restriction in the social positioning and orientation of groups. A world characterized by migration, transnational networks and global flows, as well as by a reorientation of migration and integration policies, implies new conditions for identity-formation, and music will continue to be an important way for immigrants and refugees to negotiate and develop their identities in their new setting.