The main topic of the article is analysis of institutional foundations of the ethnic federations. Special attention is paid to consideration of the two key problems: instrumental role of such federations and political representation of ethnic groups, including ethnic minorities. It is underlined that ethnic federations can play positive role and at the same time they don’t exclude the risk of destabilization and separatism. From the positive side, these federations provide for ethnic groups an opportunity for realization of their right for self-determination up to creation of their own state or political autonomy within the framework of a single state. Ethnic federations also broaden the opportunities for protection of culture, language, traditions and identity of ethnic minorities. Often ethnic federations are considered as a device for settling of ethnic conflicts, overcoming of separatism and for social integration. As the international experience shows, ethnofederalism serves as a means for securing territorial integrity of states. Ethnicity itself does not have any political content but can be used for political aims. From the negative side, a political autonomy of federal subunits can be used by ethnic political elites for ethnic mobilization in order to provide their mercenary interests not rarely connected with secession. Ethnic federations are often unstable. From the contradictory interaction of two general principles of international law – territorial integrity of states and right of nations for self-determination, a necessity follows to differentiate an estimate of secession and separatism. The author criticizes those scholars who ascribe to ethnic federations shortcomings not emanating from the objective nature of those federations. For an obvious reason political representation of ethnic groups has both moral and political meaning. It provides social integration of ethnic groups and political stability of foundations of society and state. Representation is conducive to overcoming of ethnic minorities’ estrangement. It is a condition for reduction of intensity of the ethnic conflict. The author shows different means for providing political representation: proportionality, parity, quota, reserving and some others.