In light of rising internal cleavages and centrifugal tendencies, differentiated integration (DI) has (re)arisen as a major topic in debates on the future of the European Union. As new forms of participation below the threshold of full membership are needed, this paper provides a conceptualisation of effective and legitimate DI. Going beyond existing scholarship's focus on the legal dimension of DI, the paper emphasises its organisational component, meaning the variegated participation of EU member states, sub-state entities and third-country actors in the panoply of EU policy-making institutions, such as regulatory agencies and transgovernmental networks. The paper subsequently discusses how to measure effectiveness of such differentiated arrangements in terms of their output, outcome and impact, before theorising under what conditions we are likely to see effective DI. Finally, the paper turns to the question of legitimacy of DI, discussing its meaning, measurement and determinants.