In this article, we argue that international law can help state leaders reach a settlement in territorial disputes by suggesting a focal point for negotiations. International law is more likely to serve as a focal point when the legal principles relevant to the dispute are clear and well established and when one of the states in the dispute has a stronger legal claim to disputed territory. When these two conditions are present, we expect the state with a legal advantage to push for and receive favorable terms of settlement. In our analysis of all negotiated settlements in territorial disputes from 1945 to 2000, we find strong support for the importance of international law in influencing the terms of settlements. States with a strong legal advantage are more likely to secure favorable terms, whereas states lacking a strong legal claim are more likely to receive unfavorable terms.