The redrawing of administrative boundaries and creation of new local governments are pervasive features of decentralization across the world. This redistricting process constitutes a dramatic shift in the locus of politics and often causes substantial changes in two widely debated sources of conflict: diversity and contestable public resources. Using new geospatial data on violence and the plausibly exogenous timing of district creation in Indonesia, we show that allowing for redistricting along group lines can reduce conflict. However, these reductions are undone and even reversed if the newly defined electorates are ethnically polarized, particularly in areas that receive an entirely new seat of government. We link changes in the salience of group cleavages to the violent contestation of political control by identifying new cycles of electoral violence and ethnic favoritism. Our findings illustrate some unintended consequences of redistricting in diverse settings and offer novel insight into the instrumental role of diversity in shaping conflict.