Central Libyan authorities established after national elections in 2012 and 2014 failed to exercise their functions and develop solid national institutions capable of responding to their citizens’ demands. Currently, national institutions are divided, ineffective, and highly contested by Libyans in all three regions of the country. Meanwhile, municipal councils that were elected in 2013-14 and again in 2019-20 have played an increasingly important role for governance and stability. Indeed, living in a stateless political context, Libyans overwhelmingly rely on local institutions, asking elected officials to deliver basic services, resolve administrative issues, and provide security. However, as the protracted national conflict has left the decentralization process incomplete, local municipalities do not have the means to provide consistent, high quality services in many communities. Thus, municipalities should be further empowered and supported to improve their effectiveness, responsiveness, and accountability. Furthermore, improving local governance along all its dimensions (e.g. quality of services, responsiveness, accountability, inclusiveness) is key to preventing violent extremism, which thrives in the contexts like Libya, which is characterized by weak state institutions, economic hardship, conflict, and political disenfranchisement. Relying on a quantitative (survey carried out with 2500 respondents) and qualitative (50 key informant interviews) data, this article first explains how decentralization can boost the quality of local governance in Libyan municipalities and, eventually, improving the living conditions of all Libyans. Second, the study suggests that empowered municipalities can build resilience and safeguards against forced recruitment and/or facilitation of violent extremist groups. Given the localized drivers of extremism within the Libyan context, it is critical communities are given the opportunity to create and develop their own livelihood opportunities. Finally, the study shows the challenges of decentralization that exist at many levels both within and outside of the Libyan state, including cultural, societal, political, legal, administrative, organizational, and financial.