Post-conflict elections in Mozambique, held in 1994, 1999 and 2004, established a formally competitive and pluralistic system. This paper examines the country's emerging two-party system as an essential feature affecting prospects for democratic deepening and consolidation. The condition for political parties to actually help the establishment of democratic politics is their development as durable, socially rooted, country-wide effective and legitimate organisations. The paper contends that the current party system has indeed been a major instrument for political expression and for the channelling and peaceful management of conflicts. It shows how both Frelimo and Renamo – and the competition between them – have deep-seated historical origins and well-established regional roots. Yet, a number of aspects concerning the Mozambican party system negatively affect the deepening of democratic politics: the legitimacy of the party system is weakened by post-conflict polarisation and uncertain mutual recognition; the ethno-regional entrenchment of the two main parties bestows a communal connotation on electoral competition; and most importantly, the party system remains unbalanced and unevenly institutionalised, with Frelimo's disciplined and fundamentally institutionalised organisation opposed by a strongly personalistic and weakly organised Renamo, which struggles to operate within state institutions and to accommodate internal differences.