Scholarship on East European politics expects that party competition in the region is determined by various communist legacies, juxtaposing state-centric authoritarianism to a liberal market economy. Recent empirical evidence, however, uncovers significant variance of party competition patterns across East European countries. To explain this variance, this article argues that an interaction between communist institutional framework and partisan responses to ethnic minorities determines party competition structure in the region. While experience with communist federalism determines partisan affinities with ethnic minorities, tolerance or support for ethnic minorities leads the political actors associated with those minorities to general socially liberal positions. Consequently—and contrary to received knowledge—ethnic politics influence the ideological content of party competition and structure party systems in Eastern Europe.