This paper examines the impact of the Iraq war of 2003 on growth and inflation in Jordan. By exploring Jordan and Iraq’s trade relationship, the changes in Jordan’s consumer price index, and Iraqi investment in Jordan, we differentiate between the economic challenges posed by the Iraq war in general and by the Iraqis in Jordan in particular. We find that the Iraq war has contributed significantly to inflation in Jordan because of rising food prices, rising fuel prices, and rising real estate prices. The displaced Iraqis in Jordan, on the other hand, have contributed far less to inflation and growth in Jordan than is often stated. Moreover, Iraqis’ engagement in the labor market has been limited. The impact on infrastructure and utilities varies across sectors.