Private security and military companies have become a ubiquitous part of modern armed conflict and post-conflict reconstruction. Their diverse clients include governments in the developed and developing world alike, non-state belligerents, international corporations, non-governmental organizations, the United Nations, and private individuals. The implications of this proliferation of private security and military companies for international humanitarian law and human rights are only beginning to be appreciated, as potential violations and misconduct by their employees have come to light in Iraq and Afghanistan. The author critically examines the theoretical risks posed by private military and security company activity with respect to violations of international humanitarian law and human rights, together with the incentives that these companies have to comply with those norms. Empirical evidence is also presented to expand on this theoretical framework. Taking a multidisciplinary approach, the author draws on law, international relations theory, criminology, economics, corporate strategy and political economy, as well as psychology and sociology, to analyse the competing “risk-factors” and “compliance levers” that interact at each level of private military and security company activity to enhance or reduce the likelihood of a violation occurring. These findings are then applied by the author to assess emergent measures to deal with private security and military companies outside the legal sphere, including a programme of the International Committee of the Red Cross and the advent of the International Peace Operations Association.