Despite substantial evidence that international trade has promoted peace in the post—World War II era, the commercial peace research program still faces an important historical challenge. Dramatic economic integration in the nineteenth century failed to prevent the increasing interstate hostilities that culminated in the outbreak of war in 1914. This article uses a theoretical revision grounded in standard trade theory to reexamine the relationship between commerce and peace in the fifty years before World War I, a period often referred to as the first era of globalization. The article focuses on domestic conflict over commercial policy rather than on interdependence to understand the conditions under which globalization promotes peace. In a sample dating from 1865 to 1914, the authors find that lower regulatory barriers to commerce reduce participation in militarized interstate disputes. Contradicting conventional wisdom, this evidence affirms a basic premise of commercial liberalism during the first era of globalization—free trade promotes peace.