The international organisation of the democratic peace matters. Interdemocratic institutions are particularly suited to block escalation pathways between states and to prevent conflicts from resulting in war. This article builds on findings from three fields of research: (a) the liberal analysis of the democratic peace; (b) systemic approaches to international institutions, and (c) new quantitative studies of armed conflicts. Three pivotal contributions of international institutions to peaceful conflict management are identified: international institutions can be used to overcome the security dilemma among states and to tame power competitions. They sustain international cooperation and forestall the recourse of governments to unilateral self-help strategies. Finally, international institutions increase the autonomy of issue areas, which decreases the risk of destabilising spillover effects from other issue areas. The article holds that these three functions are extraordinarily well performed by international institutions composed of democracies and illustrates this allegation by presenting three case studies of interdemocratic management of former rivalries. Therefore, the distinctive features of interdemocratic institutions merit more attention as a supplement to the explanation of the democratic peace.