The work of the contemporary Algerian author Mohammed Dib defines the notion of colonial and postcolonial terrorism in Algeria and their impact on Algerian identity. I use the term ‘terrorism’ in this paper in keeping with Martha Hutchinson's definition that takes terrorism as ‘acts of emotionally or physically “destructive harm”‘ (1978: 18). Accordingly, I classify terrorism in Algeria as coming from two different directions: the French colonial terrorism of the 1950s and the extremist terrorism of the 1990s. Both types involve ‘acts of [physically] atrocious or psychologically shocking violence’ (19) that are destructive to Algerian identity. Dib's short stories reflect what Dominick LaCapra describes as ‘“writing trauma” [that] involves processes of acting out, working over, and to some extent working through in analysing and “giving voice” to the past’ (186). This article is a study of Dib's literary representation of the Algerian trauma through four short stories: ‘Naema- Whereabouts Unknown,’ ‘The Savage Night’, ‘The Detour’, and ‘A Game of Dice’. The paper is in three parts. Part 1 gives a historical background from the French colonization of Algeria in 1830 up to the 1990s civil war. Part 2 is an analysis of Dib's vision of French colonial terrorism and its impact on Algerian identity through ‘Naema–Whereabouts Unknown’ and ‘The Savage Night’. Part 3 examines Dib's literary perspective on extremist terrorism through ‘The Detour’ and ‘A Game of Dice’.