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During past couple of decades, terrorist groups increasingly appeared more able to kill more people, gain more attention, prompted more government reactions, and become proxies for powerful sponsors. Throughout this time many terrorist groups were building reputations as formidable, legitimate actors, some of whom even showcasing the strength to launch insurgent attacks on military forces, prompting states to withdraw from territory (Cronin, 2009). There is no research yet on how group-level characteristics such as positive and negative reputation influences the audiences outside of the embattled state that is targeted by the terror group. The United States blacklist of terror groups should inform us about such effect and this study tests several hypotheses to understand the intricate patterns revealing the group reputation’s effect on designation practices. The global scope of the U.S. designation is suitable to test how an international target audience interprets terrorist violence that challengers display against their domestic audience as well as American targets. As reputations vary across the terror groups, this paper argues for organizational theory approach and contend that their organizational traits play a role in each decision-making process of designating states.