Adorno’s conception of ideology was denounced by Habermas as incompatible with a viable form of social critique. By conflating ideology and the ‘identity principle’ inherent to modern Western reason, he argues, Adorno offered an overly negative characterisation of modernity and failed to recognise its rational potential. This paper questions this line of criticism by revisiting Adorno’s position. While he does sometimes associate ideology with identity-thinking, this association does not exhaust his views on the subject. For Adorno, ideology is just as (...) much a matter of Identität as a matter of Schein, or illusion, and its practical effects. Moreover, he views ideology as an intrinsically dynamic concept, whose definition has changed throughout human history. Drawing on his late sociological writings, I distinguish three major stages in the development of the concept of ideology, namely (a) ideology as simple illusion, a definition associated with the Enlightenment and expanded by the so-called sociology of knowledge; (b) ideology as necessary illusion, invoked by Marx to capture the structural logic of capitalism; and (c) ideology as disillusionment, related to the positivism of late capitalist society. Finally, I reflect on what this survey reveals about the relationship between illusion and identity in Adorno’s theory of ideology. (shrink)