Much of the psychological debate on European home-grown Islamic terrorism leaves out the wider societal context from which the phenomenon arises. In this essay we examine the social psychological research relevant to understanding Islamic terrorism, beginning with an explanation of the wider societal forces impinging upon individuals in post-material societies. We then discuss the social psychological processes – congruent with this wider societal context – that increase the possibility of terrorism. In line with the evidence that terrorists who self-radicalise or are recruited come from ordinary social strata [1], these processes are very much part of universal human social and psychological functioning. We also consider how young Muslims draw upon available religious resources to actively construct their identities and choose courses of action. Both the structuralist approach (in which social processes are seen to impinge upon individuals) and the phenomenological approach (in which individuals are seen to construct their own identities and world views) are utilised. Research from both traditions intersects when thinking complexity is considered, and both approaches feed into our recommendations for identifying the social niches vulnerable to violent radicalisation.