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This study analyzes the effects of US drone strikes on terrorism in Pakistan. We find that drone strikes are associated with decreases in the incidence and lethality of terrorist attacks, as well as decreases in selective targeting of tribal elders. This matters for key ongoing debates. Some suggest that drone strikes anger Muslim populations and that consequent blowback facilitates recruitment and incites Islamist terrorism. Others argue that drone strikes disrupt and degrade terrorist organizations, reducing their ability to conduct attacks. We use detailed data on US drone strikes and terrorism in Pakistan from 2007-2011 to test each theory's implications. The available data do not enable us to evaluate if drone strikes resulted in increased recruitment, but the data do allow us to examine if these strikes resulted in changes in terrorist activities. While our findings do not suggest long-term effects, the results still lend some credence to the argument that drone strikes, while unpopular, bolster US counterterrorism efforts in Pakistan. [ABSTRACT FROM AUTHOR]