Federalism has remained a contested concept. The constitutional certainties of the modern federal state are under attack from confederal practices of negotiated agreement. Such practices have their traditional roots in the political theories of Althusius and Montesquieu. The central argument of this article is that the American Federalists broke with that older tradition and deliberately misinterpreted Montesquieu along the way. Consequently, the predominant reading of federalism emphasizes federal supremacy over the idea of a social compact among equal partners, territorial representation dominates over the recognition of social community, and the allocation of divided powers is guided by national prerogatives rather than regionally differentiated policy needs. Recent trends towards a more collaborative form of federalism indicate that the old model of constitutional federalism may be replaced by new practices of treaty federalism.