Recent terrorist activities (the World Trade Center bombing, the Oklahoma Federal Building bombing, the release of Sarin Gas in the Tokyo subway, etc.) have focused the national leadership on the topic of terrorism inside the borders of the United States. In response, two Presidential Decision Directives (PDD-62 and PDD-63) were issued to help define the terrorist threat and recommend a counter- terrorism organization in the federal government. However, the directives do not determine how the Federal government works with state and local authorities. The directives also do not focus on local, state, and federal capabilities to preempt a possible terrorist attack. This thesis builds a organizational framework of the U. S. counter-terrorism environment; explains the current U. S. counter-terrorism structure from a local perspective; develops a set of principles that could be used by any local or federal agency to develop a new or more efficient counter-terrorism organization; assesses two domestic counter-terrorism organizations; and proffers specific recommendations on how U. S. counter-terrorism organizations and programs could be more efficient.