Deterrence, a central feature of counterterrorism security systems and a major factor in the cost-effectiveness of many security programs, is not well understood or measured. This paper builds on a growing literature examining terrorist decisionmaking to examine the role of deterrence in counterterrorism strategy for homeland security. It discusses deterrence at the strategic, operational, and tactical levels and considers adaptations that would-be attackers are likely to make in response to security efforts. It also explores the connection between deterrence and risk transfer, which is the possibility that successful deterrence may result in increased danger to other targets, including those of higher value to the defender. This paper offers a conceptual model for understanding how security systems may deter (or merely displace) attacks and a measurement framework for establishing the relative deterrent value of alternative security systems. Because deterrence may be the most important effect of some counterterrorism security programs, this framework may be useful to security policymakers who are trying to increase the security benefits they can achieve with limited resources.