Why would an insurgent group turn away foreign fighters who volunteered to fight for its cause? To explain variation in foreign fighter usage, I present a novel perspective on what foreign fighters offer to militant groups. Because foreign fighters possess a different set of preferences from local fighters, integrated teams of foreign and local fighters can self-manage and mitigate the agency problems that are ubiquitous to insurgent groups. However, to create self-managing teams, insurgent leadership must oversee the teams’ formation. When counterinsurgency pressure prevents this oversight, foreign fighters are less useful and the leadership may exclude them. This theory explains variation in foreign fighter use and agency problems within al Qaeda in Iraq (AQI; 2004 to 2010) and the Haqqani Network (2001–2018). Analysis of the targeting of Abu Musab al-Zarqawi, AQI’s former leader, further supports the theory, suggesting that leadership targeting inhibited oversight and aggravated agency problems within the group.