This paper examines the transnational dimensions of low-level conflict and state repression. In this regard, special emphasis is placed on the role of political regimes. Drawing on a simple model, we argue that democracy has opposing effects on conflict intensity. On one hand, democracy satisfies demand for political participation and thus reduces conflict potential, while, on the other hand, we highlight that domestic democracy may spur dissatisfaction and conflict abroad, which, in turn, may induce conflict spillovers. As a result, the net effect of democracy on low-level conflict and state repression is ambiguous and depends on the level of democracy in the neighborhood: We predict that democracy is more pacifying in democratic environments and may spur conflict in autocratic environments. By the symmetry of the model, we also predict that democratic environments are more pacifying for democratic countries and may spur conflict in autocracies. Empirical evidence using panel data on different types of low-level conflict and state repression for 160 countries in the period from 1950 to 2011 supports these hypotheses. Additionally, two case studies illustrate the mechanisms of our model.