The third wave of democratization has profoundly affected national political institutions and procedures throughout the developing world. In many nations, however, local political institutions and actors also hold considerable power. Democratic reforms at the national level are not necessarily replicated at the local level, yet democratization is inherently incomplete if a nation is speckled with scores of authoritarian local political enclaves. It follows that the process of subnational political change is of vital importance. In this article this process is examined, focusing on Mexico. The question is what dynamic has led to the erosion of the PRI's dominance at the municipal level since the mid-1980s. Two theoretical models, a diffusion model and a realignment model, are proposed. Empirical tests centre on data from municipal elections in four states for the period 1985 to 1998. Using event history analysis, substantial support for the diffusion model is discovered. In contrast, evidence consistent with the realignment model emerges in only one context – a state in which a new opposition party enjoyed unusual strength.