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The number of people displaced by armed conflicts worldwide has reached levels not seen since World War II, posing significant global security challenges. While a growing body of research examines the transnational impacts of refugee flows, there have been few studies of the consequences of displacement within a country’s borders. This is important since modern civil wars create far more internally displaced persons (IDPs) than refugees. We evaluate whether and how internal displacement influences conflict dynamics. We argue that IDP inflows have a greater impact in rebel-held areas than in government-held areas. Rebel governance tends to be weaker and more contested between factions. IDP influxes therefore strain rebels’ resources and contribute to greater internal fragmentation, intensifying conflict between factions. An analysis of monthly subnational data on violence, territorial control, and internal displacement flow data from Syria between 2016-2018, along with interviews with ex-combatants, journalists, and human rights activists, provide strong evidence for our argument. This paper develops a new process explaining the spatial diffusion of civil war and deepens our understanding of the effects of internal displacement in wartime. We contribute to research on civil war, forced displacement, rebel governance, and the Syrian conflict.