The rise of the self-proclaimed “Islamic State” in Iraq and Syria has ushered to the forefront the issue of territories governed by militant Islamist (“jihadi”) groups. Informed by a growing conflict studies literature on rebel governance, this paper offers an overview of previous and current “jihadi proto-states”, discusses their characteristics and common features, and explores ways of understanding the logic of their inner workings. Although attempts to form proto-states have been a constant feature of contemporary jihadism, in the post-2011 Middle East, such attempts have multiplied. Apart from Da'esh, whose territorial expansion has been most remarkable, militant jihadi rebels have also seized and controlled territories for protracted periods of time in Yemen, Libya, and northern Mali, in addition to territories in conflict zones outside the Middle East. Each of these proto-states varies significantly, especially with regards to civilian administration in their area of control. However, they share at least four distinct characteristics: they are intensely ideological, internationalist, territorially expansive, and irredentist. They also devote significant resources to effective, if harsh, governance. The paradoxes of jihadi state building are evident in a number of ways. Jihadi ideology negates virtually all aspects of the Westphalian world order, including even the very names of existing states and their boundaries. Lacking international recognition and state support, such proto-states have poor chances of success, and their aggressive behavior vis-à-vis the outside world is seemingly in contradiction with their goal of consolidating territorial control “under Shariatic rule”. Why do jihadis jeopardize their hard-won territories by a highly aggressive policy vis-à-vis the outside world? This paper argues that forming proto-states represents a bid for increased power and influence vis-à-vis rival Islamist groups. By demonstrating a high commitment to ideological purity, jihadi proto-states seek to outbid rivals in the competition for support from external (“global jihadi”) constituencies. The paper is part of the author’s ongoing research project at the University of Oslo on jihadism and rebel governance, based on a vast compilation of primary sources (in Arabic and other languages) collected over the past fifteen years. The significance of studying “jihadi proto-states” from the perspective of rebel governance and conflict studies is beyond doubt, given the unfortunate prominence of this phenomenon in contemporary Middle East. This paper also contributes to the rebel governance literature, whose case studies rarely have been drawn from the Middle East.