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There has been considerable discussion since September 11 of the enormous resource that local police potentially represent in the fight against terrorism. This article identifies limits to the local role in homeland security by analyzing a case study of Dearborn, Michigan. Partly because Dearborn is home to one of the largest concentrations of Arabs in the United States, its experience with homeland security highlights two kinds of burdens that cities incur when they engage in proactive surveillance to identify potential terrorists: damage to their reputation (since police surveillance implies that its objects are not trustworthy) and damage to police legitimacy (since new surveillance may undermine trust between police and the community). Because the benefits of efforts to identify terrorists typically accrue to jurisdictions other than the one that engages in it—unlike street crime, terrorism is a national or even international problem—local governments have little reason to pursue it. Instead, cities such as Dearborn have reason to emphasize what I call the “community protection” aspects of homeland security, such as target hardening and emergency response. This finding has more general implications for our understanding of the police role and the politics of policing, showing how both are shaped by the structural location police occupy in federalist systems of government.