Watsuji Tetsurô (1889–1960) is famous for having constructed a systematic socio-political ethics on the basis of the idea of emptiness. This essay examines his 1938 essay "The Concept of 'Dharma' and the Dialectics of Emptiness in Buddhist Philosophy" and the posthumously published The History of Buddhist Ethical Thought (based on lectures given in the 1920s), in order to clarify the Buddhist roots of his ethics. It aims to answer two main questions which are fundamentally linked: "Which way does Watsuji's legacy turn: toward totalitarianism or toward a balanced theory of selflessness?" and "Is Watsuji's systematic ethics Buddhist?" In order to answer these questions, this essay discusses Watsuji's view of dharma, dependent arising, and morality in Hīnayāna Buddhism. It then proceeds to Watsuji's fine-tuning of the concept of emptiness in Mādhyamika and Yogācāra Buddhism. Finally, this essay shows how Watsuji's modernist Buddhist theory connects to his own systematic ethical theory. These two theories share a focus on non-duality, negation, and emptiness. But they differ in their accounts of the relations between the individual and the community, between the "is" and the "ought," and between hermeneutics and transcendence. These findings give us hints as to Watsuji's origins, pit-falls, and possibilities.