Threats posed by the current religiously inspired terrorist groups leave Malaysia with no choice but to adapt to new strategies and approaches. Not only have threats become more global in terms of networking and influences, but also the use of Islam to justify attacks produces great challenges for the country and its security enforcement. Malaysia’s promotion of moderation, or wasatiyah, as part of its counterterrorism campaign has been widely accepted by the international community. At home, the campaign of winning hearts and minds continues as an essential strategy of the government. Malaysia’s success in countering major terror threats since independence has also been credited to the role played by the police’s Special Branch (SB) Unit and the existence of preventive laws. Yet when those laws were repealed, amid a changing political climate and democracy in the country, the enforcement authorities were forced to re-strategize their intelligence gathering and to come to grips with the new legal processes, which require reasonable evidence to be presented during trials to avoid dismissal of the charges. At the same time, the SB is also upgrading its tactical skills and surveillance technology, given modern terrorists’ adaptive capabilities with a loosely connected decentralized network.