This paper assessed the relationship between terrorism and foreign direct investment in Kenya. Secondary data on the Terrorism attacks and FDI from 2010 to 2012 was used for the study. Multiple regression model was used to test of the relationship between the study variables. By applying the model, the study found that terrorism negatively affects FDI in Kenya. It was concluded that Terrorism activities negatively affect the FDI in Kenya. Terrorism activities decrease the foreign investor confidence, which decrease the FDI. The Null hypothesis that there is no relationship between terrorism and FDI was thus rejected.