This article presents the first publicly available articulation of deterrence approach to U.S counterterrorism strategy. It is argued that, unlike in state-to-state deterrence, deterrence against terrorism can only be partially successful, and that it will always be a component and never a cornerstone of national policy. Nevertheless, as long as states can deter some terrorists from engaging in certain types of terrorist activity, deterrence should be an essential element of a broader counterterrorism strategy.