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Terrain is central to understanding why some countries experience contentious ethnic divisions and civil war. While existing research specifies a direct effect of rugged terrain on civil war (i.e., it impedes state efforts to counter rebellion), we argue that terrain has an overlooked indirect effect on civil war via its historical influence on the distribution and political status of ethnic groups. We argue that access to variable rugged terrain facilitated the development and survival of more distinct ethnic groups by both restricting interaction among communities in rugged areas and complicating state repression. Both arguments suggest that groups in rugged areas face greater risk of political marginalization. Using geocoded data on civil war, terrain, and the distribution and political status of ethnic groups, we demonstrate that up to 40% of rugged terrain's effects on civil war are mediated by its indirect effect on the exclusion of politically relevant ethnic groups. [ABSTRACT FROM AUTHOR]