This article argues that high levels of government regulation of religion help to explain the “democracy gap” in majority Muslim countries. Controlling for previously hypothesized determinants of democracy, it finds that as levels of regulation increase, levels of democracy decline. Examination of specific types of religious regulation in Muslim-majority countries uncovers a pattern of repression of religious expression that may be used to mobilize citizens politically. These regulations are targeted more often at Muslims who seek independence from state-controlled religion or who wish to challenge authoritarian governments, rather than at non-Muslim minorities or at religious worship more generally. Thus, authoritarian and semi-authoritarian regimes in Muslim-majority states successfully use policies toward religion to restrict political competition and inhibit democratic transition.