This article examines a category of parastatates that has been largely neglected; the terrorist parastate. The main aim of the article is to fill this gap by scrutinizing the case of the Islamic State (IS), an organization that could be considered as the epitome of a terrorist parastate. Before the collapse of its territorial strategy in 2019, the group had targeted a significant number of states through terrorist attacks, while simultaneously controlling large swathes of territory and developing state-like institutions. During its buoyant period, IS called itself a state (Dawla), it viewed itself as a state (accomplishing a religious obligation), and perhaps more significantly, it was often perceived as a state by its enemies. The article will discuss the future prospects for the Islamic State after the collapse of its territorial/statehood strategy. After conceptualizing the nature of the terrorist parastate, the article will venture into comparative uncharted territory through an examination of the terrorist parastate vis-Á-vis its ordinary secessionist counterparts. One of the chief dissimilarities is the fact that IS, and terrorist parastates in general, tend to be less durable projects than secessionist parastates because they lack international sponsorship and they are more susceptible to foreign military interventions.