This paper sheds new light on the 1939 Palestine White Paper, which removed Britain’s historic support for Jewish colonization in place since the 1917 Balfour declaration. Known for its wartime restriction on Jewish immigration, it has commonly been depicted as another iteration of Britain’s ignominious policy of appeasement. By contrast, this research highlights British officials’ belated “discovery” of settler-colonialism in Palestine as a critical origin point for the shift in policy embodied in the White Paper. This paper shows that an inadvertent epistemic opening was created by the Peel partition plan in 1937, which committed the British government to the creation of a Jewish state for the first time. The Peel plan galvanized the second phase of the protracted Palestinian rebellion (1936-39), which seriously threatened Britain’s control over the territory. Faced with mass resistance within Palestine and potentially across the region, the Foreign Office backtracked. Picking up Palestinian lines of criticism hitherto long ignored, it began to argue that the Palestine situation had to be understood through the prism of settler-colonialism. This turnabout culminated with Foreign Secretary Anthony Eden describing Jewish settlers as the “vanguard of an invading army” and predicting that the Jewish state would be expansionist and stoke regional war. The Colonial Office strongly resisted this analysis and the attendant call to rebalance policy to account for Palestinian interests, but it too did an about-face in 1938. As the revolt rose to its peak, Colonial Secretary Malcolm MacDonald relied on diplomatic feint as well as counterinsurgency to restore British control, and the settler-colonial paradigm informed Britain’s new policy. Under his stewardship the 1939 White Paper – designed as an impossible compromise between the settler movement and indigenous aspirations – blunted the Balfour declaration and helped deflate the Palestinian uprising while priming the pump for future Jewish rebellion.