The present paper examines the issues of diaspora, cultural conflict, magic realism and feminine identity in the writings of Chitra Banerjee Divakaruni. Being a notable representative of Indian English and Asian-American literature, Divakaruni presents the emotional and cultural conflicts that an immigrant goes through, especially when it is a woman living between two cultures. In her writings, the negotiating of identity, tradition and modernity in diasporic spaces is evident in the complex process. Divakaruni uses mythology, folklore, and memory as an influence to narratives in order to blend reality and magic to reveal the cultural and psychological lives of displaced people. This work attempts to analyze immigrant consciousness and cross-cultural tensions which are seen through her fiction especially in The Mistress of Spices. The novel demonstrates how magical realism turns into a literary device to convey emotional turmoil of the immigrants having to adapt to a new world without losing their ties to their motherland. The experiences of the main character represent the larger predicaments of the diasporic people who seek to strike the right balance between individual wishes, cultural demands, and demands of the society. Moreover, the paper examines the way Divakaruni provides a voice to the women who challenge the traditions of patriarchy and who want to self-realize in new cultural environments. Divakaruni links myth and magic with the realities of immigrants by embracing both the struggles of displacement and the endurance and continuation of cultures. In this way, her fiction proves to be a strong tool of incorporating identity formation, cultural hybridity, and the changing consciousness of the diasporic women.