The article reviews the literature on the relationship between democracy and armed conflict, internal as well as interstate. The review points to several similarities between how democratic institutions affect both conflict types. It summarizes the main empirical findings and discusses the most prominent explanations as well as the most important objections raised to the finding, empirically and theoretically. To a large degree, the empirical finding that pairs of democratic states have a lower risk of interstate conflict than other pairs holds up, as does the conclusion that consolidated democracies have less conflict than semi-democracies. The most critical challenge to both conclusions is the position that both democracy and peace are due to pre-existing socio-economic conditions. I conclude that this objection has considerable leverage, but it also seems clear that economic development is unlikely to bring about lasting peace alone, without the formalization embedded in democratic institutions.