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This study offers fresh empirical insights into the causes of terror ism in Pakistan. The authors present a novel strategy for hypothesis building in conflict studies, and explore the importance of the ex planatory variables within the time frame of the analysis. The hy pothesized relationships are tested using pooled cross-section time series data from five regions of Pakistan (the federally controlled area and four provinces from 1980 to 2010) using fixed effect negative binomial regression. The results indicate that public edu cation expenditures, law & order expenditures, ethnic diversity, ur ban population, the presence of domestic military operations, and U.S. military aid to Pakistan all result in increased terrorist activ ity in Pakistan. This study recommends that ethnic diversity and multilingualism be respected in education in Pakistan, that the ed ucational curriculum be cleansed of systemic incendiary language and bigotry, that law enforcement agencies be freed of political control, and that strategic partnership with the United States be reassessed considering the core long-term interests of Pakistan.