This tentative excursion into the risky terrain of contemporary history seeks to explain the neoliberal turn which substantially transformed Mexico’s political economy, c. 1980–2000. It considers how and why that transformation took place, assessing domestic, as against international, causes; the role of reactive – compared to proactive – policymaking; and the contentious connection between economic reform and political democratization (which Mexico also experienced). It describes the peculiar regime that prevailed in Mexico pre-1980; a regime that arguably made incremental reform more feasible and less socially disruptive. The chapter charts how successive economic crises, through the 1980s and early 1990s, prompted neoliberal reform while constraining its positive results and contributing to the decline of PRI. Initially, “reactive” neoliberalism gave way – with Salinas – to ambitious “proactive” technocratic reform, which transformed the Mexican economy (by way of trade liberalization, privatizations, state-shrinking, and – crucially – the creation of NAFTA), while also affecting broader areas of policy, such as land tenure, education, Church-State relations and social provision (the contentious “Solidarity” program). Politically, while the PRI survived, it faced declining legitimacy and growing opposition from both Left and Right, which presaged its final fall from power in 2000.