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Scholars maintain that, similar to insurgency, terrorist violence is precipitated by both relative deprivation and state weakness. Yet aggrieved minority groups within a country should turn to terrorism when they are weak relative to the state rather than strong. Empirical evidence shows minority group discrimina tion and fragile political institutions to independently increase domestic terror attacks. But it remains unclear whether grie vances drive domestic terrorism in both strong and weak states. Using data from 172 countries between 1998 and 2007, we find that for strong states the presence of minority discrimination leads to increased domestic terrorism, while for weak states the presence of minority discrimination actually leads to less domestic terrorism. Consequently, increasing state capacity may not be a panacea for antistate violence, as non state actors may simply change their strategy from insurgency or guerrilla warfare to terrorism. Efforts to reduce terrorist violence must focus on reducing grievance by eliminating discriminatory policies at the same time that measures to improve state capacity are enacted