The leadership of powerful states in processes of regional institutionalization is a significant, though still widely ignored topic in the field of International Relations (IR). This study asks about the theoretical conditions of effective leadership in international institution-building, using China’s and Japan’s roles in East Asian regionalism as an empirical test case. It addresses the question of what actually happens when states perform the role of leader. Specifically, it focuses on the process of negotiating leadership claims, and different hypotheses are presented as to the requirements of effective leadership in international affairs. The findings point to the fact that leadership is effective and sustainable when foreign elites acknowledge the leader’s vision of international order and internalize it as their own. Leadership roles are often disputed and are constituted of shared ideas about self, other, and the world, relying on the intersubjective internalization of ideas, norms, and identities.