Most studies examining the relationship between social cleavages and party system fragmentation maintain that higher levels of social diversity lead to greater party system fragmentation. However, most aggregate-level studies focus on one type of social cleavage: ethnic diversity. In order to develop a better understanding of how different cleavages impact electoral competition, this article considers another type of social cleavage: religious diversity. Contrary to previous literature, higher levels of religious diversity provide incentives for cross-religious cooperation, which in turn reduces party system fragmentation. Using a cross-national data set of elections from 1946–2011, the results show that, in contrast to most studies examining the effects of social cleavage diversity on the number of parties, higher religious diversity is associated with lower levels of party system fragmentation.