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Using transnational terrorism data from 1980 to 2000, this study empirically examines the relationships between frequency of participation in transnational terrorism acts and economic development and education improvement. We find an inverse U‐shaped association between the frequency of various nationals acting as perpetrators in transnational terrorism acts and per capita income in their respective home countries. As per capita incomes increase from relatively low levels, frequencies of participation in transnational terrorism increase. However, at sufficiently higher levels of per capita income, further increase in per capita income is negatively associated with the rate of participation in transnational terrorism. Education improvement from elementary to secondary is positively correlated with frequency of participation in transnational terrorism events, whereas further improvement from secondary to tertiary level is negatively correlated with participation in transnational terrorism. We also find that citizens of countries with greater openness to international trade, lower degree of income inequality, greater economic freedom, larger proportion of population with tertiary education, and less religious prevalence participate in transnational terrorism events less frequently.