Civil wars affect the economic conditions of households by disrupting economic transactions and harming their psychological well-being. To restore basic conditions for local economic recovery in conflict-torn regions, the international community has only a limited number of tools at its disposal. We ask whether UN peacekeeping is one instrument to mitigate the negative effect of conflict on households’ economic well-being. We argue that, by reducing violence and heightening perceptions of safety, UN missions (i) encourage labor provision and economic exchanges, and (ii) instill confidence by reducing the psychological impact of daily stressors. Combining high-frequency household survey data and information on subnational deployment of UN peacekeepers in South Sudan, we show that peacekeepers’ military presence improves security (observed and perceived), which in turn revitalizes local economies and households’ subjective well-being. These improvements ultimately boost households’ consumption, partially countering the negative effect of ongoing civil wars by keeping local communities’ economy afloat.