Conversation is both rule-governed and a venue in which people are differentiated, in how they act and are acted toward. I propose a new framework for the analysis of conversational sequences that captures both aspects simultaneously, based on the concept of participation shift. This refers to the moment-by-moment shuffling of individuals between the “participation statuses” of speaker, target, and unaddressed recipient. An analysis of participation shifts in meetings of thirteen managerial groups reveals the operation of sequential rules that limit who can speak and be addressed in a given turn; several dimensions along which individuals are differentiated in terms of their participation shift involvements; and effects of conversational context on individuals' sequential tendencies. The analysis bridges conversation-analytic concerns with the sequential production of talk and small-group researchers' interest in conversational discrimination and points to several new lines of micro-sociological research.