How does sea power differ from land power? We introduce a formal model that explains several characteristics of sea power. Specifically, (i) sea power is more highly concentrated than land power; (ii) it follows cycles; and (iii) is characterized by periodic intensification of arms competition. We account for these features in terms of the high fixed costs and the capital-intensive nature of naval warfare. We find empirical support for our model using a newly digitized dataset of over two dozen navies during the late 19th and early 20th centuries.