In multiethnic country, respect of diversity and ethnic equality is a major tool for national integration. To do this, strong good governance and democratic institutions are very important. In line with this, the state structure which is implemented by ruling political party has its impact on interethnic relations. In the history of Ethiopia, centralized political system during imperial and the Derg regime had long years’ experience and focused on nation-building, regardless of diversity. However, both of them were neither accommodates diversity nor stopped the question of nationalities. Thus, since the Derg took power, different ethnic based rebellions appeared in different parts of the country and escalated into extensive armed struggle. After seventeen years of civil war, 1991 was marked the collapse of the Derge regime and the formation of the new state structure under the ruling party, Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF). Thus, EPRDF implemented the identity-based federal structure by restructuring the constitution and answer the question of nationalities including self-determination up to secession. Therefore, this paper is aimed to assess the impacts of identity-based federalism on national integration. Key Words: multiethnic, federalism , diversity, nationalities, identity-based, impact, centralize and national integration