Abstract The post-Cold War period has seen the rise of international liberal peacebuilding, as an overarching framework for international interventions in intrastate conflicts. In contrast, the current period is marked by decline of liberal peacebuilding, and a simultaneous rise of domestic illiberal peacebuilding. This has created a gap between the predominant theoretical and policy framework and the actual form of peacebuilding in many conflict-ridden societies. The present article addresses this challenge through a contextual case study of illiberal peacebuilding in Myanmar. The case study shows how a dominant state actor – the military (Tatmadaw) – has used both coercion and co-optation to contain armed resistance against militarized and centralized statebuilding and thereby strengthen the state's territorial control and authority. While the SLORC/SPDC military junta (1988–2011) sought to contain ethnic armed organizations through military offensives, ceasefire agreements and illiberal peacebuilding, the military based USDP-government (2011–2015) institutionalized a hybrid regime as a framework for political transformation of EAOs, and tolerated a degree of dual territorial, administrative and resource control at the local scale. These clientelist measures failed to address the substantive issues behind Myanmar's multiple and protracted conflicts. They were also combined with military offensives against non-ceasefire groups and war by other means in ceasefire areas. Moreover, the case study demonstrates that the Tatmadaw used its tutelary power to obstructs substantive conflict resolution through negotiated state reforms. Myanmar's peace initiatives during the last three decades should thus be understood as illiberal strategies for containing ethnic armed organizations rather than attempts at substantive conflict resolution.