Producing agents that can generalize to a wide range of environments is a significant challenge in reinforcement learning. One method for overcoming this issue is domain randomization, whereby at the start of each training episode some parameters of the environment are randomized so that the agent is exposed to many possible variations. However, domain randomization is highly inefficient and may lead to policies with high variance across domains. In this work, we formalize the domain randomization problem, and show that minimizing the policy's Lipschitz constant with respect to the randomization parameters leads to low variance in the learned policies. We propose a method where the agent only needs to be trained on one variation of the environment, and its learned state representations are regularized during training to minimize this constant. We conduct experiments that demonstrate that our technique leads to more efficient and robust learning than standard domain randomization, while achieving equal generalization scores.