Until recently, comparative social policy research remained strongly influenced bymethodological nationalism (i.e. an approach equating social boundaries with stateboundaries) and has rarely considered immigration-driven changes in welfare states. Yet,over the past decades, immigrant populations have grown in size and become increasing­ly diversified, both in terms of origin countries and in terms of integration patterns, in allWestern countries. Immigrants are a more visible, but also contested, presence in West­ern societies, which affects also the development of the national labour market and wel­fare systems. This chapter focuses on the link between immigration-driven ethnic diversi­ty and welfare state development by considering four interrelated issues: (1) how the pat­terns of immigrants’ labour market incorporation in host societies affect the social rightsthey are entitled to; (2) how increasing international migration contributed to the recon­figuration of care arrangements; (3) the implications of immigration-driven multicultural­ism for welfare state sustainability; and (4) the connection between immigration and pub­lic support for the welfare state. Then, we narrow down our analysis by providing a moredetailed account of recent development of migration policies in some European countries.Based on the analysis of the country cases, we put forward the argument that recent in­stitutional developments point to an ‘Americanization’ of European migration policy and,therefore, to an increasing ‘racialization’ of European welfare states.