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Previous criminological research finds that repressive counterterrorist efforts often fail to deter terrorism, creating a ‘backlash’ of elevated terrorist activity in subsequent periods. Outside criminology, others have concluded differently, finding that the discriminate and indiscriminate repression by state actors can, in some cases, reduce the likelihood of subsequent violence. Inherent in these studies is the reliance on contested territory as a primary grievance motivating violent activity. Questions remain whether counterterrorism efforts are deterrent when conducted remotely and without contestation over specific territory. To address these questions, the current study will evaluate the effectiveness of drone strikes as a counterterrorism tool to combat Al-Qaeda in the Arabian Peninsula (AQAP) in Yemen between 2008 and 2012. Time-series and geospatial models examine the relevant deterrent effects of drone strikes, controlling for the level of discrimination in particular strikes as well as exogenous factors (presidential election and protests during the Arab Spring, etc.). Results suggest that while drones may moderately deter subsequent terrorist activity, there is a substitution effect whereby AQAP shifts towards fewer, more lethal attacks. Thus, drone strikes as a remote, discriminate form of counterterrorism may provide both deterrent and backlash effects on subsequent terrorist activity, depending on the outcome of interest.