This contribution investigates the role of education in domestic terrorism for 133 countries between 1984 and 2007. The findings point at a nontrivial effect of education on terrorism. Lower education (primary education) tends to promote terrorism in a cluster of countries where the socioeconomic, political and demographic conditions are unfavorable, while higher education (university education) reduces terrorism in a cluster of countries where conditions are more favorable. This suggests that country-specific circumstances mediate the effect of education on the (opportunity) costs and benefits of terrorism. For instance, the prevalence of poor structural conditions in combination with advances in education may explain past and present waves of terrorism and political instability in the Middle East. The results of this study imply that promoting education needs to be accompanied by sound structural change so that it can positively interact with (individual and social) development, thereby reducing terrorism.