The end of the Cold War has brought about a decrease in global tensions while regional disorder has increased. In particular, Southeast Asia has become an area of regional economic and political instability. As a result, the possibility of an increase in terrorism, separatist violence, ethnic disputes, and stained regional relations takes on greater significance, both for United States foreign policy and regional Southeast Asian relations. The main purpose of this thesis is to examine political terrorism in Southeast Asia, with particular attention paid to terrorism conducted by separatist groups in Thailand and Indonesia. Secondly, this paper will discuss what actions are needed to contain political terrorism in the region. Additionally, this paper will examine U.S. Government anti-terrorist/counter-terrorist policy and how it affects political terrorism in the region. Finally, this thesis will demonstrate that there is a growing threat of terrorism in Southeast Asia that can no longer be addressed unilaterally and that ASEAN can use U.S. policy and global initiatives as guidelines for greater cooperation. It is therefore recommended that U.S. policy towards terrorism need not change to accommodate Southeast Asia and that ASEAN and its individual states take greater steps toward containing the spread of terrorism in the region.