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This essay examines the rise of government-sponsored anti-terrorist death squads in Spain that accompanied the return to power of the Left since the interwar Second Republic. It locates the roots of this disturbing and puzzling development in the institutional culture of the military inherited from the Franco regime as shaped by its history of counter-terrorism policies. This argument challenges widespread assumptions about a clean break in authoritarian practices in Spain following the democratic transition of 1977. It also calls into question the claim that civilian supremacy over the military was established in Spain by the time democracy was deemed to have reached "consolidation" in 1982. The conclusion culls the lessons of the Spanish experience of battling terrorism with terror for the comparative study of democratization. It suggests that dirty wars intended to eradicate terrorist organizations can erode the legitimacy of a nascent democracy and, paradoxically, prolong the fight against terrorism.