The main aim of this article is to contribute to the understanding of organizational autonomy and control in higher education reform and related expectations as regards the performance of universities. Our analyses draws on principal-agent models as a normative theory of policy reform, and institutionalist approaches in public policy and institutional design as an analytical theory of policy reform. We discuss how the dominant narrative of political reform moves away from traditional beliefs in university autonomy that are built on institutional trust and linked to professional autonomy. In the emerging narrative of political change, autonomy becomes re-defined as the ‘new organizational autonomy’ of universities as both strategic actors and as an addressee of governmental control. The concept of ‘regulatory autonomy’ captures the use of organizational autonomy of universities as a tool of a new regime of governmental control. Exemplified by the Dutch case, we analyze autonomy policies for strengthening managerial discretion and internal control of universities that are combined with regulatory policies for external control that steer organizational choices. Regulatory autonomy thus aims at aligning universities more closely with governmental goals and improve respective performance. Our literature review shows, however, that there is scarce, inconclusive and methodologically problematic evidence for a link between ‘organizational autonomy and performance’. We point at promising avenues for further research on autonomy and performance as two core concepts in the contemporary higher education debate.