Terrorist organizations are both imitative and innovative in character. While the drivers of imitation have been extensively modeled using concepts such as contagion and diffusion, creativity and innovation remain relatively underdeveloped ideas in the context of terrorist behavior. This article seeks to redress this deficiency by presenting a conceptual framework with which we can understand the complex nature and multiple drivers of creativity and innovation within terrorist organizations. The overriding questions we address are: what factors spark creativity and innovation within terrorist organizations, and are there particular organizational traits that increase an organization's propensity to be creative and innovative? Using insights from industrial and organizational psychology and aided by illustrative examples and case studies from the history of terrorism, we aim to show that the multiple drivers of creativity and innovation are identifiable. By providing a conceptual framework that explores these key issues, we suggest that a much clearer research agenda for these issues may emerge. We conclude with a discussion concerning how our framework can help inform counter‐terrorism practices.