Today, the Horn of Africa is a hot spot of international terrorism. Thanks to its geographical proximity and strong historical tie with the Middle East where many militant Islamic extremists originate, it has become a breeding ground and haven of international terrorist groups. Although there are some complementary factors; religion particularly Islam manifested in the form of Wahhabism ideology is the major cause of international terrorism in the sub-region. Against this backdrop, IGAD started initiatives to counter-terrorism. As a regional development organization, it has extended its mandate to take peace and security in the Sub-region seriously since 1996. Likewise, since the September 11 tragedy on America, member states have became conscious about the security challenge posed by international terrorism and planned to take a joint action. Accordingly, IGAD focused on looking for ways and means to support the efforts of member states in fighting terrorism. However, though IGAD has gone a long way in countering international terrorism in the Horn of Africa, its effort is far from success due to institutional, sub-regional and external involvement challenges.