This article seeks to extend the theoretical discussion of interstitial emergence to an authoritarian context. An interstitial space is a space whose relations with the dominant power structure are not yet institutionalized. In analyzing interstitial emergence in an authoritarian context, it is necessary to examine the interaction between interstitial space and the state as an institutionalizing force and recognize that 1) institutionalization is an ongoing process that spans over a period and 2) a state’s intervention may induce unintended consequences. The rise and fall of labor NGO activism in China between 1996 and 2020 are used as a case to illustrate the theoretical discussion. Labor NGOs emerged out of the interstices of state control since the 1990s. Although the state started to regulate these organizations since the late 2000s, its intervention lacked consistency. Before the state finally gained the capacity to enforce rules, which was around 2015, labor NGOs had already launched a series of advocacy activism and cultivated a group of activists who identified with the value of social movement. Hence, although the activism was eventually incorporated, it had successfully thematized labor issues and produced enduring impact on the culture of public discussion.