The German-Jewish intellectual Hannah Arendt (1906–1975) had famously opposed the establishment of a Jewish nation state in Palestine. During the Second World War, however, Arendt also spoke out repeatedly against the establishment of a binational Arab-Jewish state. Rejecting both alternatives, Arendt advocated for the inclusion of Palestine in a multi-ethnic federation that would not consist only of Jews and Arabs. Only in 1948, in an effort to forestall partition, did Arendt revise her earlier critique and endorse a binational solution for Palestine. This article offers a new reading of the evolution of Arendt's thought on Zionism and argues that her support for federalism must be understood as part of a broader wartime debate over federalism as a solution to a variety of post-war nationality problems in Europe, the Middle East and the British Empire. By highlighting the link between debates on wartime federalism and the future of Palestine, this article also underscores the importance of examining the legacy of federalism in twentieth century Europe for a more complete understanding of the history of Zionism.