This paper aims to explore aspects of the contemporary phenomenon of immigration from Balkan countries into Greece, linking it to wider developments taking place at the international level and locating transnational elements. More precisely, it focuses on contradictory processes of social incorporation of Albanian and Bulgarian immigrants in Thessaloniki, based on empirical material deriving from fieldwork research. The analytical framework used in the paper is built upon: (a) the political, institutional and cultural context, with particular reference to the social and political responses to immigration; (b) the socio-economic context of the local labour market where immigrants work; and (c) the sociospatial context, seen in relation to the city’s social geography and the transformation of the urban space.