President Ronald Reagan did not make immigration a major focus of his administration. However, he came to support the package of reforms sponsored by Simpson and Mazzoli and signed the Immigration Reform and Control Act into law in November 1986. Upon signing the act at a ceremony held beside the newly-refurbished Statue of Liberty, Reagan said, "The legalization provisions in this act will go far to improve the lives of a class of individuals who now must hide in the shadows, without access to many of the benefits of a free and open society. Very soon many of these men and women will be able to step into the sunlight and, ultimately, if they choose, they may become Americans."

The act required employers to attest to their employees' immigration status and made it illegal to hire or recruit unauthorized immigrants knowingly. The act also legalized certain seasonal agricultural undocumented migrants and undocumented migrants who entered the United States before January 1, 1982 and had resided there continuously without the penalty of a fine, back taxes due, and admission of guilt. Candidates were required to prove that they were not guilty of any crime, had been in the country before January 1, 1982, and possessed at least a minimal knowledge about U.S. history and government and the English language.

The law established financial and other penalties for those employing undocumented migrants, under the theory that low prospects for employment would reduce undocumented migration. Regulations promulgated under the Act introduced the I-9 form to ensure that all employees presented documentary proof of their legal eligibility to accept employment in the United States.

By splitting the H-2 visa category created by the Immigration and Nationality Act of 1952, the 1986 law created the H-2A visa and H-2B visa categories, for temporary agricultural and non-agricultural workers, respectively.