The article analyses the impact federalization processes may have on the dynamics of ethnic conflict in multiethnic democratic states. Parting from basic theoretical premises as regards the capacity of federalization principles to manage ethnoterritorial conflicts within multiethnic states, the Belgian and Spanish cases are chosen in order to explain the main theoretical contradiction, whether federative restructuring of a state contributes to reducing ethnic tensions, helps to mitigate divisions and fosters accommodation, or, on the contrary, provides ruling regional elites with relevant resources to fuel further disintegration. Both Belgium and Spain underwent a series of constitutional reforms pursuing the same objective to accommodate ethnic claims; however, while the Spanish solution of autonomous statutes proved to be successful in reducing the risk of state disintegration, the federalization of Belgium seems to have enhanced the cleavage. Among the main factors that contribute to system stabilization and national integration or make secession more likely, the following elements are analysed: constitutional and institutional mechanisms that are applied in specific sociopolitical contexts; type and degree of political autonomy granted to various groups; state-wide and subnational electoral and party systems and their interplay; historical experience of intergroup relations; evolution of ethnoterritorial identities.