The 1939 Option Agreement between Italy and Germany concerning South Tyrol was the first population transfer agreement in western European history. Its analysis offers a unique opportunity to shift the focus of the historiography on interwar minority questions from eastern to western Europe, thus challenging the lingering view of eastern Europe as a land of endemic ethnic heterogeneity and conflict. Furthermore, the 1939 Option illuminates a form of 'consistent ambivalence' that problematizes dominant analytical frameworks concerning the management of ethnic differences. Italian fascists consistently affirmed the inevitable assimilation, and therefore inclusion, of minorities within the Italian nation, but they also deeply distrusted them. As this ambivalent attitude reached a climax in the 1939 Option, in order to understand fascist behaviour during the implementation of the agreement we need to consider the longer history of fascist attempts to homogenize the new provinces. Three features structured these attempts: a belief that the assimilation of these minorities would be inevitable; the absence of means to carry out radical solutions; and a deep-seated distrust of the minorities. Fascist policy during the Option was simultaneously more ambivalent than the current historiography suggests and more consistent with the regime's interwar homogenization policies.