As a reoccupation of land immediately in front of Parliament House for six months in 1972, the Aboriginal Embassy was an inspiring demonstration of Aboriginal self-determination and land rights. Since 1972 demonstrators have maintained an Embassy on the site as part of the continuing Aboriginal struggle. Significantly, on its twentieth anniversary in 1992 Embassy protestors declared Aboriginal sovereignty just as the state-initiated formal reconciliation process was getting underway in Australia. Within mainstream public discourse in Australia, reconciliation is understood as aligned with a progressive politics. In this paper we examine the reactionary politics of reconciliation vis-à-vis the struggle for land rights and sovereignty that the Embassy embodies. To this end we examine a debate within legal theory about the relation between ‘constituted power’ (state sovereignty) and ‘constituent power’ (democratic praxis). Following Antonio Negri, the Embassy can be understood as one manifestation of the constituent power of Aboriginal people (and their non-Aboriginal supporters) that the Australian state appropriates to shore up its own defective claim to sovereignty. We illustrate this by comparing the symbolism of the Aboriginal Embassy with that of Reconciliation Place in Canberra. We complicate this analysis by discussing how the Embassy strategically exploits the ambiguous status of Aboriginal people as citizens within and without the community presupposed by the Australian state. In doing so the Embassy makes present the possibility of a break with the colonial past that is often invoked in the politics of reconciliation but which the Australian state has failed to enact.