What explains the variation in the legal systems of Middle Eastern states? This paper addresses the building of colonial institutions in the Middle East and their subsequent evolution with a focus on the legal system. Colonial institutions have been linked to a wide variety of political outcomes, from democracy and economic development to domestic order and international security. However, our understanding of the emergence and persistence of colonial institutions remains limited. Why were imperial powers able to transplant their preferred institutions into some of their colonies, and not others? What accounts for the historical evolution of these legal systems? A rapidly growing “legal origins” literature has shown that legal institutions influence financial development, government ownership of banks, and the regulation of labor markets. At the same time, there is a widely shared assumption across the new institutional economics scholarship that post-colonial institutions reflect the choices of the colonizer, whether it is the extraction of resources or the building of representative institutions. This is a highly problematic assumption that discounts the colonized populations’ agency. Accounts of colonial history provide numerous examples where subject populations and local elites resisted imperial designs, appropriated colonial institutions for their own purposes, and occasionally collaborated with the imperial powers to reach separate ends. This paper shows that legal institutions in the Middle East were shaped by the engagement between the European powers, pre-existing institutional frameworks, and domestic urban classes. More specifically, it argues that the level of implementation of pre-colonial legal and administrative reforms affected the relationship between the colonial administrations and the local elites. Regions with extensive pre-colonial institution-building, such as Egypt, were able to resist direct transplantation of the institutions of the colonizer. Areas where the pre-colonial institution-building and reform efforts were less intensive, such as Palestine, Jordan, and Cyprus, were more thoroughly penetrated by colonial institutions. This paper provides a comparative analysis of legal institution-building in the late Ottoman period in the Middle East, and examines the impact of these efforts on the subsequent transformations of legal institutions under British rule and the nation states.