In this paper we shed light into the process of institutionalization of labor migration in Israel. Specifically, we show the ways by which state regulations created a fertile ground for the creation of a precarious and captive labor force of non-citizens in the Israeli labor market. We focus on the following four main dimensions: (1) the policy of quotas, work permits, and subsidies; (2) the binding system which regulates employment relations; (3) the creation of an infrastructure for manpower agencies that over time became the main stakeholder in the institutionalization of labor migration; and (4) the creation of a complementary mechanism for the “discipline” and control of workers in the form of the deportation policy