Interactions between social movements and government actors have been conceptualized as either combative and exclusionary or institutionalized and coopted. This article transcends that dichotomy by tracing one social movement organization's tactical pursuit of institutionalization, examining the process through which institutionalization occurred, and evaluating its effects. This case study, based on qualitative, archival data, traces the institutionalization of the gay and lesbian social movement organization, the Dutch Association for the Integration of Homosexuality, COC, between 1986 and 1994. The analysis offers three findings: First, institutionalization is a process built through sustained exchange relations over time. Second, institutionalization does not necessarily result in cooptation but does involve tradeoffs. Third, both SMO and governmental actors are affected, albeit differently, by the process of institutionalization. While the COC was primarily affected organizationally, the Dutch government became more activist by attempting to influence the social institution of sexuality to accommodate homosexuality.