The key purpose of this study was to find out the causes of terrorism through the perceptions of university students enrolled in teacher training institutions. This study was quantitative in nature. A sample of two hundred and sixty seven students was selected from public sector teacher training institutions. A self-developed and validated instrument was used to identify students' perceptions about the causes of terrorism which consisted of thirty two statements. Responses were obtained on five point Likert type scale. Mean, Standard deviation, independent sample t-test, and One Way ANOVA were applied to analyze the data. The major findings of the study indicated that students perceived poverty, foreign interference, wrong interpretation of Islamic preaching, and social injustice as the main causes of terrorism. It is also found that most of the participants think that drone attacks on the border areas of neighboring country, from the air basis provided to foreign army, are the major causes of terrorists' activities. On the basis of these findings it is recommended that, as education is a key medium to create awareness about the causes of terrorism. There is an urgent need to educate the people and specially youngsters to play their role in establishing peace in the region.