“Sectarianization”—the political instrumentalization of sectarian identities—is a profitable strategy for many state and non-state actors. This paper presents a theory of sectarianization, as well as an accompanying typology. The paper does not seek to explain the causes of sectarian conflict; rather, the paper examines how third parties respond to exogenous instances of such conflict. The paper argues that third parties face incentives to cultivate strategic ambiguity about their own stances, especially amid significant religious and political competition. In such competitive environments, third parties appear to take stances based on the interaction among three factors: first, a short-term cost-benefit analysis of whether to take sides and if so, how far to align with either of the main two sectarian actors; second, pre-existing relationships between the third party and the two main sectarian actors; and third, a desire to maintain long-term credibility with the broadest audience possible.