States’ choices on term limits are quantified as a multiple-categorical variable capturing variation in the type of limits passed. Measures of relative political influence in Congress explain much of this variation. Using 1992 data on the American states, the model controls for unobserved heterogeneity due to voter access to direct democracy in some states. At 2002 values for congressional tenure and federal spending, the model predicts approximately eight to ten additional states would choose to limit their own members’ terms but cannot under a Supreme Court ruling. We discuss implications for institutional federalism and the potential passage of similar political institutions across the states. Copyright Springer Science+Business Media, LLC 2007Term limits, Political institutions, Federalism, Political economy,