For centuries, European history was characterized by a fundamental paradox: While interpolity relationships on the continent were often relatively symmetric—without any dominant power being able to permanently establish a hierarchical relationship to the other major powers—the relationships between European states and polities in other world regions were generally hierarchical and exploitative. How can we explain this major difference? I argue that the symmetry of relationships among states within Europe, particularly in the form of sustained and intense military and economic competition, was constitutive of the exploitative and hierarchical relationships between Europe's states and other parts of the world. Specifically, three mechanisms connect sustained rivalries to imperialism: (1) rulers' desire to improve their relative status/prestige trough colonial conquest; (2) pressure from public budget deficits that amplified colonial exploitation; and (3) the creation of powerful interest groups in the form of navies and armies that were in favor of imperial expansion. Moreover, when territorial conflict over colonies escalated, imperialism could ultimately feed back into interpolity competition in Europe. I demonstrate these dynamics through systematic analyses of the rivalries between France and England (circa 1689–1815, with earlier origins) as well as Imperial Germany and the United Kingdom (circa 1871–1918).