The Article traces recent trends in the management and distribution of citizenship within the Israeli context of the 1990s, as they have evolved in the wake of new modes of migration that are neither Jewish nor Palestinian and that stem from liberalized market policies. The Article focuses on administrative and policy initiatives taken since September 2003 that deal with the naturalization of the children of undocumented labor migrants. The vulnerable situation of these migrants in lacking resident status and being eligible for deportation, as well as the predominant Jewish ethno-national character of the Israeli state, make these initiatives and policy measures particularly surprising. However, these measures also reveal the boundaries of liberalizing reforms, as they become part of general trends in the nation-state towards deeming membership manageable without upsetting its national politics of identity. Indeed, it will be argued that, though this liberalizing legal reform is part of a larger context of demystification of national citizenship taking place in Israel following the adoption of socioeconomic liberal policies, it is also indicative of the adaptability of the nation-state as it seeks to prioritize ethno-national definitions of citizenship in the face of new challenges.