For the discipline of Arabic literature in the United States, 'theory' is a double entendre: promise, danger. Until the mid-1990s, U.S. Arabic literary studies was landlocked in Near Eastern language departments, whose 'anti-theoretical' bent Magda Al-Nowaihi imputes to dependence on U.S. government and Gulf state support. Theory is 'dangerous' to such funders, Al-Nowaihi maintains, because it traffics in 'the relations between knowledge and power. The result is a situation where European departments produce the theory, we provide the raw material.' 'Theory' is what Arabic literature needs'to become a site and an agent of aesthetic-political critique'yet lacks because powers of state insulate its energies within microtextual hermeneutics. Uniquely empowered to translate Arabic literature from particularist 'ghetto' to universalist (Euro-dominant) 'center' through the abstracting medium of 'theory,' then, 'European departments' control Arabic literature's legitimization. What emerges is a curious chiasmus: 'theory' is at once a danger to state power and a desideratum for Arabic literature, on the one hand, and a seat of institutional power within the U.S. humanities and a danger to Arabic literature, on the other.