In Lebanon, the fear of tawteen, or ‘settlement,’ makes naturalization of Palestinian refugees an anathema. Yet, several groups of Palestinian refugees have received Lebanese citizenship since 1948, most (in)famously those from the ‘seven villages,’ a chain of Shia villages on the Palestinian-Lebanese border incorporated in Palestine in the 1916 Sykes-Picot agreement. The trajectory of their naturalization is largely unaddressed by academics and, where it is discussed, is presented as a straightforward consequence of top-down Lebanese electoral politics. Based on a qualitative analysis of documents and in-depth interviews conducted during a five month fieldwork period in Spring 2013, this paper presents the case of one such community: the inhabitants hailing from the village of Salha, now in occupied Palestine, currently living in Shabriha, a small town near the city of Tyre/Sour in South Lebanon. There, they live next to an informal settlement inhabited by Palestinian refugees that have not acquired citizenship. Adopting the ‘negotiated state’ framework, the paper offers an inductive, bottom-up perspective on the community’s gaining of citizenship. It is argued that rather than merely following from the electoral interests of Lebanon’s political leaders, naturalization resulted from the community’s purposeful instrumentalization of existing resources (the financial and social capital of the community’s clan leader) and active reinterpretation of available repertoires (alternating nationalist and sectarian identities). The paper further contends that the object of negotiation central to the naturalization was not only votes in exchange for state resources, but, more importantly, party-loyalty in exchange for a degree of local self-governance. Contrasting the situation of the naturalized Palestinians in Shabriha with that of their non-naturalized Palestinian neighbors, finally, shows that in the quest for such relative autonomy citizenship was a key resource as it provided the naturalized Palestinians with access to formal negotiation tables, whereas the non-naturalized Palestinians are consigned to bargaining in informal negotiation arenas. Presenting and explaining the story of a community that was once stateless but is now referred to by their Palestinian fellows as ‘the children of the state’ makes a twofold academic contribution. Empirically, it offers a detailed historical case analysis of a structurally under-analyzed phenomenon. Analytically, it conceptualizes the nature and consequences of this naturalization process in a way that goes beyond the default instrumentalist electoral approach and presents a more nuanced account of the process as a negotiated exchange about not just access to, but also independence from, state and party.