The internationalization of higher education is considered to be a major policy agenda in the global knowledge society. For Japan, internationalization has been a key driver in academic and social advancement, while its traditional culture and national identity have also been retained. Recently, a series of policies have been presented by the government, university, and industry to attract more students and top calibre researchers from Asia and further afield, and to enhance exchange and collaboration, internationalization at home, and global human resource development. Concurrently, the controversial nature of internationalization has been pointed out, as well as the stagnant mobility of Japanese students and their inward-looking attitude. This paper discusses the internationalization of Japanese higher education by examining the relevant policy, practice, and perceptions of the people and institutions concerned. The major findings reveal the complexity of internationalization as a dynamic process of change, its vulnerability and marginality, and the extent of the gap between policy and practice. The author also addresses the increased relevance of the research in this field to policy-making and practice in education and its contribution to the production of new knowledge.