Article 4(2) of the Treaty on the European Union, in its novel formulation provided by the Treaty of Lisbon, requires the Union to “respect Member States’ national identities, inherent in their fundamental structures, political and constitutional, including regional and local self-government”. This work seeks to elucidate the meaning and the legal implications of the identity clause in its current wording. To this end, this work analyzes the working documents of the European Convention to determine the drafter’s intended role of the so-called “Christophersen clause”, the predecessor of Art. 4 (2) TEU. It then focuses on the use of the identity clause by the ECJ in the review of both EU and national measures. This work challenges the conventional assumption that the evident purpose of the clause is that of applying in exceptional cases of conflicts between EU law and domestic constitutional law—in an attempt to narrow the scope of application of the supremacy doctrine—and explores the potential use of the clause in the ordinary functioning of EU law. Some normative recommendations will be put forward as to the identity clause potential use in safeguarding Member States’ cultural diversity, regulatory autonomy, and margin of appreciation.