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This article introduces the term “ethnocracy” as a regime type. In ethnocracies such as Bosnia and Lebanon, political parties are defined primarily along ethnoreligious lines, key state positions are allocated according to ethnic group membership, and educational and other institutions are officially segmented according to ethnic categories. While the introduction of ethnocratic regimes after violent conflict has sometimes coincided with a decrease in violence, it has also introduced new and institutional obstacles that render transition to liberal democracy difficult. This article defines ethnocracy, differentiates it from consociationalism, discusses its problems, addresses the puzzling phenomenon of ethnocracy promotion by liberal powers, and offers alternatives for those seeking to promote liberal democracy in postconflict, multiethnic societies.