This report analyzes the threat of narco-terrorism in Afghanistan and Pakistan. It explains the extent to which insurgent groups are involved in, or profit from, the drug trade, as well as describes relationships between insurgent groups and individual traffickers, criminal organizations, and state governments. Insurgent groups discussed include the Afghan Quetta Shura Taliban (QST), the Tehrik-e Taliban Pakistan (TTP), the Haqqani Network, and foreign groups including the Islamic Movement of Uzbekistan and the Kurdistan Workers’ Party. The report also assesses claims that Al Qaeda is supported by Afghanistan’s drug trade. The report outlines counternarcotics and counterterrorism policies of Afghanistan, Pakistan, and the United States and its Coalition partners, assesses their effectiveness and shortcomings, and suggests priorities for future strategies. This assessment addresses the effects of continued corruption on Afghan counternarcotics efforts and discusses Pakistan’s inconsistent actions toward insurgent groups.