This article examines the effect of ‘War on Terror’ discourses on the ways in which young Somali Muslim women negotiate hierarchies of belonging in Britain. It begins by considering how discourses of the ‘War on Terror’ have helped to legitimize Islamophobia and to exclude Muslims from belonging to the nation. The main part of the article draws on the findings of a study of Somali young women in a London college. It argues that while young Somali women in London construct themselves as unaffected by Islamophobia, their efforts to establish themselves as ‘cool’ by forging ‘new Muslim identities’ and ‘new ethnicities’ are driven by their positioning low down in the local hierarchies of belonging as a result of Islamophobia and racism.