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AbstractDominant orthodoxies within the study of terrorism have developed and promoted a strategic understanding of terrorism which has, in effect, reinforced the very conflict it seeks to explain. In response, this article develops the challenge of critical terrorism studies to propose a new strategic approach to terrorism. It posits that, while unable to achieve a Clausewitzian victory over the state per se, terrorism is able to politically paralyse the state's overwhelming power by shifting the moral horizons of that state's constituency. We explore two mutually reinforcing mechanisms by which terrorism achieves this objective and explore a number of strategic policy implications of each. This new approach is needed as current approaches misrepresent the challenge the global community currently faces, creating a self‐perpetuating loop of conflict and grievance which promises no end to terrorist violence.