This article analyzes the connections among state formation, hegemony, and the Singapore government’s policies toward Nanyang University--a private college operated by the local Chinese to perpetuate Chinese cultural tradition. When Singapore underwent decolonization after World War II, the state was under pressure to blunt the cultural distinctiveness of the Chinese residents and subdue the growth of Nanyang University. However, after the British installed popular elections, the state, which legitimacy depended increasingly on the support of Chinese people, had to avoid being too oppressive against the college. To resolve this dilemma, the ruling authorities absorbed Nanyang University and transformed it into a state institution, yet at the same time endeavored to dilute its “Chineseness.” This historical case suggests that state formation may entail contradictory demands and that scholars analyzing state hegemony should conceptually differentiate the dimensions of institution and culture.