The two decades of Montenegro's transition that followed the disintegration of Yugoslavia were marked by the transformation of the ambitions of the ruling political elites, which pushed the republic that once sought to be a member in a federal state towards independence. The shift in the agendas of the political elites also changed the meaning of the notions of “Montenegrin” and “Serb”. Hence, this paper looks at the cleavages that emerged during Montenegro's divide over statehood and identity. It asserts that elite competition in unconsolidated states prompts the emergence of ethno-cultural cleavages, which are necessary for establishing the identities of political elites and of their followers. The study first identifies the critical junctures for the emergence of functional and structural cleavages in Montenegro and associates these cleavages with the changing political context. It proceeds with an analysis of ethno-cultural cleavages, arguing that these emerged from the politicization of historical narratives. The study concludes by arguing that different types of cleavages supported the division over statehood and identity, and that as a result of the changes in identity in Montenegro, the political reinforcement of overlapping cleavages was essential in order to cement the ethno-cultural identities of the two camps.