This article focuses in large part on the specificities of a comparatively obscure refugee situation—that of the approximately 100,000 people who have arrived in Nepal since 1990, claiming Bhutanese refugee status. It outlines the sociohistorical background to the problem, describes the way in which it has unfolded, and evaluates the refugees' claims through a survey of documentary evidence and field visits to Nepal and Bhutan. By measuring the realities of the situation against a theoretical model proposed by Anthony D. Smith in 1994, it then considers the extent to which the problem has arisen as the result of a conflict between two differing modes of ethnic nationalism: the new style of nationalism promoted by the Bhutanese state since the late 1980s, and the demotic nationalism of the cross-border Nepali population of the broader region. Although the paper addresses this particular case in some detail, its discussion is relevant to other instances where refugee flows have been caused by the formulation of new, more exclusive models of the nation state.