Political scientists often characterize state and local governments as marginal and highly constrained in policymaking. However, I suggest that in recent decades state governments have moved from the margins to the center of partisan battles over the direction of U.S. public policy. Across 16 issue areas, I investigate interstate policy variation, policy differences across states, and policy polarization, the changing relationship between party control of state government and policy outcomes. Since the 1970s, interstate variation has increased such that an individual’s tax burden, right to obtain an abortion, and other relationships to government are increasingly determined by her state of residence. Policy polarization increases dramatically after 2000 in 14 of the 16 areas. I show that party control increasingly predicts socioeconomic outcomes in the polarized area of health care, but not in the nonpolarized area of criminal justice.