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We study the role of party fragmentation and polarization in democratic deconsolidation in interwar Europe. Existing research shows that present-day democracies in Western Europe and North America experience high levels of polarization and democratic deconsolidation unknown in the post-World War II period. Yet few, if any, contemporary democracies have failed. We use interwar Europe as a comparison case for contemporary phenomena. We make two theoretical contributions. First, we explore party system polarization along multiple dimensions, including class, ethnicity, and church-state relations. Second, we highlight the interplay of polarization and fragmentation in bringing about democratic deconsolidation and breakdown. We hypothesize that deconsolidation and breakdown tend to be more likely in highly polarized two-party systems and in highly fragmented systems with little polarization. Our predictions contrast with Satori’s well-known concept of polarized pluralism that describes polarization along with fragmentation. Empirically, we introduce novel data on 130 elections across 25 European democracies between 1919 and 1939. We provide descriptive evidence in line with our arguments. Moreover, we suggest a causal identification design to estimate the effect of polarization and fragmentation. We draw on the effective electoral threshold to distinguish parties that barely made it into parliament from those that did not. We conclude by discussing the parallels and differences to contemporary democratic deconsolidation.