This paper proposes that the psychological and behavioral effects of terrorist threat can be understood as a collective communication process that occurs between terrorists and their potential victims. Based on classic communication theory, terrorists are regarded as the senders of a specific collective message (such as ‘stop oppressing our culture’); a terrorist incident as the collective message itself (through its performance, modality and targets); and the potential victims as its collective receivers (who interpret the intention of the attack as a function of their pre-existing attributes, such as traits or salient social identities). The perception of terrorism as a dynamic and interactive process between collective senders, messages and receivers opens new theoretical perspectives regarding whether (a) terrorism can be successful in reaching its collective aim; (b) if it is interpreted as rational or irrational; and (c) how to counteract the vicious, cyclical relationship between terrorism and counter-terrorism. Previous findings on the psychology of terrorism can be organized within this theoretical framework, and the psychological impact of varying attributes of the perpetrators (senders), incident (message), and the reactions of the potential victims (receivers) systematically investigated. A series of self-conducted studies are also reviewed and found to provide direct support for the collective communication model of terrorism.