While there have been several studies on overt forms of marginalization, few examine benevolent marginalization, where people may unquestioningly participate in their own paternalistic subjugation by following a prescribed identity. How might such individuals end up achieving emancipation from an infantilizing identity? To address this puzzle, we conducted a longitudinal study of a German sheltered workshop, an organization providing employment for disabled people. We observed that workers with disability initially maintained a regulating organizational identity based on paternalistic segregation. However, over time they constructed their own self-determining identity and co-produced a change in the workshop’s identity from “shelter” to “inclusion.” First, we show that in order to co-construct their preferred self-concept, benevolently marginalized individuals need to gain the support of those in power who change their role from a guardian to an ally. Second, while achieving liberation from overt marginalization is likely to involve confrontation with one’s oppressors, we suggest that achieving emancipation from benevolent marginalization is a collaborative process of mutual consciousness-raising and sensitization. Third, while changes of identity may occur after exposure to alternative discourses, often involving the contentious performances of external activists, we show how insider activists mobilize collective action for change within a protectionist organization.