A long process of state-institutional change underlay an eventual swift restructuring of Northern Ireland on a more equal basis in the 2000s. This article shows how change occurred and explains its phasing, arguing that it took a threshold form. It gives a distinctive characterisation of the ‘recognition’, ‘agenda’ and ‘implementation’ thresholds, and the different politics that followed each. This model of state change is of interest in three ways: in providing a distinctive characterisation and explanation of the process; in addressing the comparative literature on ‘exclusion’, conflict and settlement by sketching a threshold model of change from ‘exclusion’ to ‘inclusion’; and in speaking to a pressing moral concern – if settlement was possible at all, why was it not possible sooner? The article makes use of new evidence in the form of over 70 elite interviews with senior British and Irish politicians and officials who made, influenced and closely observed the process.