We study the effect of the institution of the Central Asian states in the 1920s on the stability of the Soviet Empire and nation-building in the region. The Bolsheviks instituted autonomous Soviet republics in Central Asia by delineating the territory that had not had national borders before and, in each republic, gave political power to a particular ethnic group among those residing on its territory. We combine novel historical data on local insurgency against the Soviet state and intergroup conflict in Central Asia from declassified archives of Soviet police reports with historical census data on local group composition. We find that the reform substantially reduced the level of insurgent activity against the Soviet power and lowered conflict between local groups. The national delimitation of Central Asia resembles very closely to an ideal territorial division into states that would minimize within-state group segregation with one important exception: Northeast Kazakhstan, with its large presence of European migrants, is a separate state. We show that the main effect of the reform comes from the areas that comply to the “ideal division” rule. The Europeans in Northeast Kazakhstan, in contrast, revolted against the reform. Changes in the naming patterns and the self-reported identities from the censuses suggest that the reform caused stronger identification with the titular national group in each republic. We also show that Soviet investments in human capital facilitated nation-building for the titular national group.