Why does ethnic violence occur in some places but not others? This paper argues that the local ethnic configuration below the national level is an important determinant of how likely conflict is in any particular place. Existing studies of ethnicity and conflict focus on national-level fractionalization or dominance, but much of the politics surrounding ethnic groups’ grievances and disputes takes place at a more local level. We argue that the existence of multiple ethnic groups competing for resources and power at the level of sub-national administrative regions creates a significant constraint on the ability of states to mitigate ethnic groups’ grievances. This in turn increases the likelihood of conflict between ethnic groups and the state. In particular, we argue that diverse administrative regions dominated by one group should be most prone for conflict. Using new data on conflict and ethnic group composition at the region level, we test the theory and find that units with one demographically dominant ethnic group among multiple groups are most prone to conflict.