Optical properties of lithium triborate (LBO) in the terahertz regime (0.2–2 THz) were characterized using broadband terahertz time-domain spectroscopy. The frequency dependence of refractive index and absorption coefficient of the LBO crystal was experimentally investigated over the temperature range of 77–297 K, which the experimental results indicated that LBO has very low optical absorption coefficient at terahertz frequencies especially for the beam polarization along the crystal’s principal dielectric axis X. Moreover, a giant birefringence was observed, and the refractive index difference between the axis X and Z gradually decreased with decreasing temperature, which is attributed to the behavior of the TO phonon modes of B1 and B2 symmetries at low frequencies at different temperatures. As potential applications, LBO can be exemplarily used as terahertz wave shapers, beam splitters, terahertz wave plates, circular polarizers and other polarization devices.