Following September 11 in the US and July 7 in the UK, the threat to civilians from terrorist attack has become real yet considerable disagreement exists about how people might respond. The effect of aerial bombing on the public’s morale during the Second World War and the incidence of psychiatric casualties have been explored to provide reference points for the current terrorist threat. Systematic study of restricted government investigations and intelligence reports into the effect of air-raids on major British towns and contemporary medical publications have shown that panic was a rare phenomenon and arose in defined circumstances. Morale fluctuated according to the intensity of attacks, preparedness and popular perceptions of how successfully the war was being conducted. Resilience was in part a function of the active involvement of the public in its own defence but also reflected the inability of German bombers to deliver a concentrated attack over a wide area. Most civilians, by their very numbers, were likely to survive. Inappropriate or excessive precautionary measures may serve to weaken society’s natural bonds and, in turn, create anxious and avoidant behaviour. Weapons that tap into contemporary health fears have the greatest psychological impact. Efforts by government to engage the public not only build trust but may also make an effective contribution to the campaign against terrorism.