Part of a series of studies on higher education in different countries, this paper examines internal differentiation of Japanese higher education and the problem of coordination, using a comparative perspective. The crucial difference in the division of universities by subjects among different nations has been between chair and department organization. In Japan, both kinds of organization are found, but the chair structure has been the more important of the two. The Japanese tier structure has been more like the European mode than the American; there is no sharp distinction between undergraduate and graduate study as in the United States. Both Japan and the United States have a range of institutional types that have developed under private sponsorship as well as state authority. Japan has numerous sectors and subsectors among its large population of 1,000 institutions. Japan has much institutional hierarchy in higher education; there is a vertical ladder of prestige ranking among the many sectors. For over a century, Japan has provided bureaucratic coordination of higher education in the form of a national ministry of education, and professors are also involved in coordination nationally as well as locally. Political influences on higher education have been exerted by political officials and to some extent by external groups, and the consumer market is extremely active in Japanese higher education. (SW)