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The incidence of domestic terrorism varies dramatically across the states of India. This study demonstrates that important state-level differences in political party systems help to explain different levels of terrorist activity within the Indian states. Analysis of statisti cal data on terrorist attacks as well as other political, social, and macroeconomic indicators of the twenty-seven Indian states and the Delhi municipality from 1998 to 2006, determines that Indian states characterized by multiparty electoral competition, a diffu sion of legislative seat distribution among parties, and minority partygovernmentaremorelikelytoexperienceterroristattacksthan states with stable, two-party systems and majority party rule. These party system features increase the likelihood that terrorism will oc cur because they nurture the political conditions under which ter rorism is likely to flourish and because they impair government ability to craft coherent and effective responses to terrorism.