This is the first article to analyze a large sample of terrorist groups in terms of their policy effectiveness. It includes every foreign terrorist organization (FTO) designated by the U.S. Department of State since 2001. The key variable for FTO success is a tactical one: target selection. Terrorist groups whose attacks on civilian targets outnumber attacks on military targets do not tend to achieve their policy objectives, regardless of their nature. Contrary to the prevailing view that terrorism is an effective means of political coercion, the universe of cases suggests that, first, contemporary terrorist groups rarely achieve their policy objectives and, second, the poor success rate is inherent to the tactic of terrorism itself. The bulk of the article develops a theory for why countries are reluctant to make policy concessions when their civilian populations are the primary target.