How does inequality within and between ethno-religious groups influence the likelihood and frequency of communal riots? Using evidence from India, this article finds that low within-group and high between-group inequality dampens the likelihood and frequency of communal riots. Theoretically, the article suggests that the instrumental logic, which posits that ethnonationalist politicians use violence to stoke ethnic cleavages and mobilize support, best accounts for this finding. We argue that to be politically competitive, ethnonationalist politicians need their supporters to identify foremost with their ethnic identity. When inequality within groups is high and/or inequality between groups is low, citizens are less likely to focus on ethnicity as their primary identity. In such contexts, politicians may use communal riots to improve their electoral prospects by reinforcing the salience of ethnicity. Empirically, the article relies on a time-series cross-district analysis of inequality and Hindu–Muslim riots in India to test the instrumental argument against theoretical alternatives. To illustrate the causal logic, the article also uses the analysis of a communal riot that occurred in Muzaffarnagar, Uttar Pradesh. Analyzing three aspects of the riot – background conditions, timing, targets of propaganda – we evaluate the different predictions of the instrumental argument. The article concludes with the suggestion that communal riots are distinct from cases of mass violence – such as civil wars, genocide, and ethnic cleansing – and could be conceptualized, along with other types of small-scale political violence, as a separate class of events with their own internal logic.