To safeguard peace in multi-ethnic countries, scholars and practitioners recommend territorial autonomy. However, there is limited cross-national research on how autonomy affects subnational ethnic conflict, and increasing concern that it redirects ethnic violence from the national to the subnational level. Addressing this gap, I argue that autonomy generates tensions over subnational government control and the distribution of local economic goods. However, whether these turn violent depends on ethnic representation in the central government. If groups are unequally represented, violent escalation is more likely due to information and commitment problems and subnational majoritarianism. To test these arguments, I provide new time-variant data on subnational boundaries, territorial autonomy, and ethnically attributed violence. I conduct a systematic analysis of all multi-ethnic countries between 1989 and 2019, instrumental variable analyses, and tests of my argument’s intermediate implications. My findings underline the importance of complementing autonomy with inclusive central governments to attenuate the risks of subnational violence.