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Territorial autonomy is a two-edged sword: it reduces minorities' willingness to challenge the state; yet, at the same time, it also provides them with more capabilities to do so. Existing scholarship recognizes that the drawing of territorial boundaries critically moderates these effects, yet remains divided in its recommendations. Addressing this issue, I argue that territorial units need to be homogeneous for autonomy to reduce minority grievances. Yet, adverse effects arise where homogeneity coincides with the concentration of ethnic minorities in single autonomous units. In such cases, autonomy disproportionately boosts minority leaders' ability to solve coordination problems and thereby increases the temptation of armed challenges. I test these expectations on the ethnic group-level, employing new, geo-coded data on administrative units and their autonomy for 180 countries since the Second World War. The results are in accordance with my expectations. They are robust to various specifications and instrumental variables approaches which exploit colonial legacies. I provide additional support for my arguments by tracing their implications in a set of geo-referenced mass surveys. In sum, my analysis highlights the need to take more seriously the question of how territorial boundaries are drawn in the comparative study of autonomy and conflict.