The present study proposes a theoretical conjuncture between diaspora and ideology. I engage myself conceptually with the idea of diaspora in the current context by putting forth the proclamation that diaspora can be viewed as the agent of constructing trans/national ideology that is transformed and universal. Diaspora is a psychological imbibing of immigrants in new socio-cultural environment that affects immigrants’ ideological construction. Ideology is fundamentally a psychoanalytical relocation/understanding of the way people become part of the social group that forms an ideology. For the purpose of this study, I assume that the operation of ideology in human life primarily involves the psychological process of be/coming human subjects. I also assume that the construction of ideology involves cognition, which entails the psychological process of accepting social individuality and it is human psychology that shapes ideology. In the light of these debates on diaspora and re/constructing and retrans/ formation of ideology, this study attempts to explore psychological relocation of people living in diaspora through the application of Lacan’s psychoanalytical theory. This study attempts to examine and analyze the representations of socio-cultural, national and religious ideological construction in selected literary texts of Pakistani British/American diaspora writers. The purpose of this study is to present an alternative way of analyzing diasporic ideological transformation through applying Lacanian psychoanalytical theoretical framework particularly Lacan’s theory of mirror stage or construction of self identity. Through an analysis of the various nuances of immigrant experiences depicted in the selected literary texts, this study concludes that diasporic displacement is a psychological process of the formation of humans into social subjects. Diaspora is not merely the physical relocation of human beings but also focuses on the psychological repositioning of immigrants in new surroundings.