While the analysis of programmatic strategies of parties and their impact on the political process has become a major research topic in comparative politics, there are, however, only few attempts that take a closer look at patterns of party competition at the local level. In this paper, we answer the question to which degree parties on the local level ‘copy’ patterns of party policy conflict that exist in multi-level systems. In a second step, we analyse the determinants of coalition formation on the local level. In addition to ‘classical’ office- and policy-seeking variables, we are also incorporating the local institutional setting and the constraints on local coalition politics emerging from patterns of party competition at the regional level in the multi-level political system of Germany. Our analysis is based on a new dataset that covers information on the polity positions of local parties and independent local lists in the cities of the German state of North Rhine-Westphalia on the basis of their election manifestos. We are covering the time period from 1994 to 2012. Furthermore, we incorporate information on local institutional characteristics like the possibility of ‘cohabitation’ between the local council coalition and the directly elected mayor, as well as information on ministerial portfolio allocation on the regional level. The results show that policy positions of local parties on the societal dimension as well as office-seeking reasons are good predictors for local coalition formation in German cities. Additionally, our empirical findings suggest that local political actors take the party affiliation of both the directly elected mayors and the state minister of interior into account when forming coalitions in local councils.