Terrorist attacks in the United States and in Western Europe have been rare, and public awareness of the terrorist menace has largely been molded by a few horrific events. In contrast, other countries have experienced chronic terrorism, with attacks on buses, restaurants, coffee shops, and retail establishments. In this review, we assess the impact of terrorism on civilian society in the United States, Northern Ireland, and Israel. We examine the psychological effects, the adaptations made by individuals to enhance their safety, and the consequent adjustments made by institutional actors and by commercial establishments to ensure continued economic viability. We review the various theories of societal adjustments to exogenous shocks and point out that a very different formulation is required for the case of chronic terrorism than for the societal experience of a one-time attack.