In 1996, the United States witnessed one of the most dramatic transformations in the history of its social welfare policy. "Welfare reform" eliminated individual entitlements to poverty relief, enforced strict terms of participation for welfare recipients, and formally denied welfare benefits to nearly all immigrants. Existing research suggests that the states which passed the most punitive welfare reform policies were those with the most Black and Latino welfare recipients. However, a number of states with strikingly similar demographics and politics passed vastly different welfare reform policies. These outcomes are surprising given the large body of historical work demonstrating that, throughout the 20th century, racialized constructions of welfare have undermined the development of a generous social safety net in the U.S. Did large Black and Latino populations influence welfare reform in some states but not in others? Under what conditions did race and immigration factor into welfare reform decisions? This dissertation investigates these questions by examining four of the most critical state welfare decisions: time limits, work requirements, sanctions, and benefits to immigrants. Drawing on an array of methods, including legislators' and governors' papers, non-profit organization records, media content analysis, and in-depth interviews with legislative leaders and welfare advocates in each state, I examine the interplay between race, immigration, and welfare policymaking in four states: Alabama, Georgia, Arizona, and California. Among states with large Black recipient populations, Georgia passed punitive welfare reform policies, including the shortest time limits and strictest sanctions in the nation, while Alabama adopted some of the most lenient policies, allowing welfare recipients the maximum possible allowances available under federal law. Similarly, among states with large Latino recipient populations, Arizona passed particularly punitive policies in comparison to California, despite their shared political and economic configurations at the time and a virulent anti-immigrant movement in California. While the literature highlights the role of public opinion, racial resentment, and stereotypes in welfare policymaking, I advance a racial conflict model to explain the relationship between race, immigration, and contemporary welfare politics. I argue that while racialized stereotypes of welfare recipients may be ubiquitous, whether race and immigration spur punitive welfare policies depends on the content and structure of antecedent political conflicts in a polity. In states with large Black and Latino populations, policymakers passed punitive policies when welfare reform arose after the activation of widespread racial conflicts. These racial conflicts, even if unrelated to poverty policy, had three enduring consequences for welfare reform, ultimately fueling the passage of punitive policies. First, they activated racial threats and resentments which both constrained the actions of politicians and provided a political resource for them. Second, the frames used in these racial conflicts limited the availability of frames during welfare reform and made some frames more politically advantageous than others. Finally, these conflicts determined how much politicians stood to gain politically from passing punitive policies. In constructing this theory of racial conflict, I also argue that the involvement of minority politicians and race-based advocacy groups in the welfare reform process had disparate impacts in the South than in the West. While activism by Latino elected officials facilitated the passage of lenient reforms, activism by Black elected officials hindered it. This pattern reflects the finding in existing research that across most spheres of social life, integration is harder for Blacks than for Latinos. These findings suggest a new way to think about the relationship between race, immigration, and policy. Scholars typically view support for welfare as reflective of public opinion or racism. This study reveals welfare policy's roots in existing social and political conflicts. It also moves beyond the Black-White divide to address how public policies shift in response to other ethno-racial minority populations like Latinos. Finally, by developing a theoretically-driven account of the welfare reform process that moves beyond public opinion analysis or discussions of individual racism, the dissertation brings a fresh perspective not only to debates about welfare state development but to debates about how and when race and immigration enter into contemporary politics.