There exists a broad consensus among welfare state researchers that the welfare state has not been retrenched in any fundamental manner. Instead, a process of restructuring is unfolding in response to globalization, European integration and internal pressures. However, the question remains whether welfare state reform has led to convergence on the European scene. This article discusses the new literature on convergence and divergence from a Nordic perspective, and gives an account of how reforms affected the patterning of European welfare states towards the late-1990s. The article is based on key findings from a large empirical research project comparing welfare state adjustment and its consequences in several dimensions among Western European welfare states over the past two decades. It concludes that welfare state change has led to convergence in some areas, but above all, it has been characterized by parallel trends that can be identified in different welfare states. Such parallel trends in turn have meant persistent diversity among welfare regimes.