How did actors who embraced a social-communitarian and authoritarian version of Islam in the 1990s adapt to a free-market and democratic interpretation of Islam in the 2000s? I argue that we need to look at patterns of political activism, rather than upward mobility and development of civil society alone, to understand this transformation. I use the state-society and polity models developed in political sociology to respond to the inadequacies of political economy and civil society models. Scholars such as Evans, Skocpol, Mann, and Migdal have accounted for major social transformations by focusing on the interactions between official institutions on the one hand and civil society and changing political economic patterns on the other. I contribute to this literature first by extending its focus to the transformation of culture and local contexts as well. Second, I point out the significance of the political party in such transformations. I argue that, at least in some cases, the political party can be reduced neither to an official institution nor an organization within civil society. Its logic of leadership rather connects civil society and the state to each other. The political party is the missing conceptual link in most current political sociological accounts of state-society interaction. Studying Sultanbeyli, a previously Islamist district in Istanbul, uncovers the basic dynamics of the massive transition from Islamic radicalism to free-market conservatism. I first analyzed Islamic politics in this district between 2000 and 2002. The backbone of the study is based on participant observation in teahouses, mosques, schools, party headquarters, and the municipal building. I supplemented this ethnographic experience with fifty semi-structured, in-depth interviews. By 2006, Sultanbeyli had become the ideal place for studying different patterns of Islamization over the decades. In the 2002 general elections and 2004 municipal elections, which both occurred after my first visit to the district, the area’s population shifted from support for Islamist parties to the free-market conservative Justice and Development Party. In this part of the study, while focusing again on participant observation, I collected an additional forty semi-structured, in-depth interviews. My analyses do not deny the importance of an emergent business-class and associational activity, and their liberalizing impact. Still, what I demonstrate is that without decisive political leadership, the transition from communitarian to neoliberal Islam would be much less complete. In other words, the political party did not create neoliberal trends from scratch, but it gave them a more definitive direction.