This thesis investigates the emergence of an indigenous middle class between 1975 and 2010 in Bolivia - a country characterized by poor and unstable long-term economic growth, high inequality, and enduring ethnic and class cleavages. The study takes a two-tiered approach. It focuses first on tracing the emergence of the middle class by highlighting the main drivers of socio-economic improvement for individuals. Based on a longitudinal examination of a Socio-Economic Index (SEI) - upon which the middle class is operationally defined in this thesis - I explain the emergence of the middle class as the result of two distinct but interconnected processes: (i) a massive urbanization process that reached a peak in the mid-1980s, which brought individuals closer to areas favoured by state policies; and (ii) an institutional change in the mid-1990s, consisting of a new national framework that allocated resources more efficiently throughout the country. In addition, my analysis uncovers the different occupational trajectories that middle-class individuals followed to gain access to the new structure of opportunities and to prosper and become part of the middle class. Based on inter- and intra-generational analyses of occupational mobility, I find that in a context of an over supply of labour and with limited skills and economic capital, migrants found the means to thrive socially and economically in commerce, transport, and construction activities. Secondly, I explore the extent to which the emergence of the new middle class has opened-up opportunities for indigenous peoples. I conduct a periodic headcount of indigeneity based on spoken languages (indigenous and/or Spanish) and self-ascription to indigenous groups. Two messages emerge from this exercise. First, the new middle class has provided opportunities for individuals who are monolingual in indigenous languages, whether they ascribe themselves or not to an indigenous group. Second, individuals' ethnic identities become fuzzier as they move into the middle class. This is revealed by indigenous language loss and a significant decrease in self-ascription that happened in a markedly stratified manner over just ten years. I tackle the intricacies of middle-class ethnic identity by drawing on a social identity conceptual framework that allows me to integrate synergistically the discussions on class, ethnicity, and modernization. By approaching social identities through the analysis of differentiated lifestyles, I find that new middle-class individuals have hybrid and segmented identities. That is, individuals combine indigenous/traditional and modern forms of living that vary according to their socio-economic level, but do not necessarily move towards cultural assimilation. I contend that the creation of new status symbols and forms of recognition based on indigenous idiosyncrasies in the new middle class constitutes a categorical break with historical, ethnic-based forms of social, economic, and cultural exclusion and discrimination. In summary, this thesis advances the conceptualization and understanding of the middle class, contributing to the burgeoning literature on emerging middle classes in developing countries by offering a more complex picture of its expansion and identity construction.