We seek to characterize empirically the trade‐off between loyalty and competence that presidents make when appointing individuals to serve in U.S. federal agency leadership positions. These trade‐offs are analyzed from publicly available pre‐nomination information on 1,372 appointees within 39 major government organizations from the Carter through G. W. Bush presidencies. We find that loyalty–competence trade‐offs involving policy‐specific expertise are much stronger than those involving managerial skills. In addition, these loyalty–competence trade‐offs are more acute for top‐level bureaucratic leadership positions relative to subordinate counterparts, as well as for executive branch agencies relative to independent regulatory commissions. We also show that these loyalty–competence trade‐offs become stronger as presidents are less ideologically aligned with the policy activities of federal agencies, and during times of unified partisan control of the appointment process.