This article examines the moderation of the Mexico's National Action Party in the context of democratization. Founded in 1939 as a confessional party, by the 1990s the PAN had moved toward the political center – retaining its Christian-Democratic identity and ideals but also making institutional appeals to the broader voting public in Mexico. This article explains the segmented process through which the PAN moderated in response to inclusionary reforms promulgated by Mexico's authoritarian regime. In some cases, those reforms merely aggravated internal tensions in the party. But other reforms repositioned the PAN vis-à-vis its competitors, Mexican civil society, and the Mexican voting public, and triggered institutional changes that enabled the PAN to build political momentum in advance of the country's 2000 democratic transition. Employing an institutional process-tracing approach, this article examines how shocks in the PAN's competitive environment reverberated inside the organization: how they affected the relative power of factions in the party, how they were mediated by existing party institutions, and how they related to the party's ideological goals. Those crucial intra-party processes, I argue, influenced whether the PAN, as an organization, responded to those exogenous shocks in terms of its competitive behavior, and conditioned how the PAN responded when it did so. The case of the PAN demonstrates that parties may respond to inclusionary reforms or other exogenous shocks in relatively uncoordinated and unsystematic manners.