Indentured servants first arrived in America in the decade following the settlement of Jamestown by the Virginia Company in 1607.

The idea of indentured servitude was born of a need for cheap labor. The earliest settlers soon realized that they had lots of land to care for, but no one to care for it. With passage to the Colonies expensive for all but the wealthy, the Virginia Company developed the system of indentured servitude to attract workers. Indentured servants became vital to the colonial economy.

The timing of the Virginia colony was ideal. The Thirty Year's War had left Europe's economy depressed, and many skilled and unskilled laborers were without work. A new life in the New World offered a glimmer of hope; this explains how one-half to two-thirds of the immigrants who came to the American colonies arrived as indentured servants.

Servants typically worked four to seven years in exchange for passage, room, board, lodging and freedom dues. While the life of an indentured servant was harsh and restrictive, it wasn't slavery. There were laws that protected some of their rights. But their life was not an easy one, and the punishments meted out to people who wronged were harsher than those for non-servants. An indentured servant's contract could be extended as punishment for breaking a law, such as running away, or in the case of female servants, becoming pregnant.

For those that survived the work and received their freedom package, many historians argue that they were better off than those new immigrants who came freely to the country. Their contract may have included at least 25 acres of land, a year's worth of corn, arms, a cow and new clothes. Some servants did rise to become part of the colonial elite, but for the majority of indentured servants that survived the treacherous journey by sea and the harsh conditions of life in the New World, satisfaction was a modest life as a freeman in a burgeoning colonial economy.

In 1619 the first black Africans came to Virginia. With no slave laws in place, they were initially treated as indentured servants, and given the same opportunities for freedom dues as whites. However, slave laws were soon passed – in Massachusetts in 1641 and Virginia in 1661 –and any small freedoms that might have existed for blacks were taken away.

As demands for labor grew, so did the cost of indentured servants. Many landowners also felt threatened by newly freed servants demand for land. The colonial elite realized the problems of indentured servitude. Landowners turned to African slaves as a more profitable and ever-renewable source of labor and the shift from indentured servants to racial slavery had begun.