Malay, Chinese and Indian Malaysians, thrown together by a colourful past, have often managed a mutual accommodation of each other's different faiths and cultures.
But the recent argument over the use of the word "Allah" has provoked strident - and divergent - views both within the Muslim community and outside it.
So too has the labelling of Indian and Chinese Malaysians as "pendatang", or immigrants, by a senior ruling party member, Nasir Safar.
He lost his job as adviser to the Prime Minister Najib Razak 12 hours later.
Meanwhile, the cancellation of a concert by US singer Beyonce, the arrest of young unmarried couples for "close proximity" and the caning sentence given to a mother for drinking beer have all attracted international attention.
Such rows call into question whether Malaysia is a state in which different races and faiths live in equality and comfort with each other, or whether the country is becoming more conservatively Muslim at the expense of others.
Change of direction
The results of the 2008 elections ramped up the tension.
The ruling coalition still won, but with a much reduced majority in the worst result in 50 years.
Norani Othman, a professor at the Institute of Malaysian and International Studies (IKMAS) at Universiti Kebangsaan Malaysia, says that after independence, there was a national emphasis on consensus-building and equality.
That was adapted, after race riots in 1969, to more overtly pro-Malay policies.
As Muslim nations around the world struggled to modernise, yet not lose touch with their traditional roots, the influence of Islamist parties expanded.
In Malaysia, that pitted the ruling United National Malays Organisation (Umno) against the Islamic Party of Malaysia (PAS) with the result that the 1980s saw a deliberate process of Islamisation.
What were once affirmative action policies geared to help Malays "catch up" with other Malaysians became policies enshrining Malay primacy or ascendancy, and being Malay meant being Muslim.
Institutions deemed to conform with Islamic principles and values were created - Islamic banks, Islamic insurance, Islamic university - there was even talk of "Islamising knowledge".
The list of matters judged to be under the jurisdiction of Islamic laws has expanded over the decades.
Just as the so-called race riots of 1969 were in fact a sign of systemic breakdown, as Australian academic Clive Kessler argues, so do the current tensions pose a direct challenge to Malaysia's founding aspirations of a diverse and democratic nation, argues Prof Othman.
The trend, she says, is clear: "It is one of a steady increase in religious authoritarianism and intolerance, emanating from many key sectors and influential levels of Malaysian Muslim society."
National citizenship training has sparked recent controversy, with some critics saying it was contributing to an apparently unstoppable rise of race and faith-based exclusivity.
Participants report they are told that the only thing left for the Malay community is power, because they are a majority, and that any loss of power could mean they become something like an American Indian in their own country, one source said.
Shoring up that power involves "the projecting of the Other, the non-Malay, as always conspiring or wanting to take over", she said.
That siege mentality is expressed in the claim that non-Muslims using the word Allah might convert Muslims - even when figures suggest that Islam is the fastest growing faith in the country.
A new group called Perkasa - meaning strengthen - is avowedly pro-Malay. Critics call it chauvinistic.
Its founder, Ibrahim Ali, says: "If the Malays are not happy, then it will become a problem."
Rising stars such as Idris Haron, MP for Melaka and a member of Umno's Supreme Council, has supported party colleagues who describe non-Malays as "immigrants".
"Yes the fundamental structure of the country is race-based," says Mr Haron.
"It is the Malaysian way of life that a Malay must be a Muslim," he says - and that Malays are rightfully "the top priority when it comes to political development".
Mr Haron argues that the Chinese and Indians in Malaysia live far better than they would in other countries, thanks to Malay tolerance and generosity.
But the determination of one's rights according to one's race and religion profoundly worries not only Malaysia's many more liberal minds - it bothers the strategists behind the ruling coalition too.
They know that loyal non-Malays no longer see them as representative of a pluralist centre of Malaysian life.
The elections in March 2008 also showed many Malays deserted Umno, their traditional source of protection and wealth.
Hence Prime Minister Najib Razak's creation of the One Malaysia idea.
"One Malaysia, very simply put, is to promote unity in diversity - with the emphasis not just on tolerance but mutual respect", the Minister for National Unity, Tan Sri Dr Koh Tsu Koon, told the BBC.
"We recognise the polarity and we are engaging it," he said.
Many Malaysians want clear progress from a determined leadership, says Chandra Muzaffar, chairman of the independent One Malaysia Foundation.
They say a new multi-faith, multi-racial body is needed not just to talk about but implement solutions to sources of division.
"We need very concrete solutions, about handling the deceased (of different faiths within one family), the conversion of minors, custody of children, the use of Allah, circulation of literature for Christians in Bahasa Malaysia (Malay language). I personally think the obstacles placed in the way are bureaucratic obstacles.
"We have to resolve it. At the moment we don't have an effective channel of communication between the communities," he said.
A clue to the problem is visible at the seat of federal government, the created city of Putrajaya.
It has two huge mosques.
Ten years after the city was built, permission has been granted to one Christian and one Buddhist group to build their own houses of worship.