This article explores how international humanitarian law (IHL) may apply to protect innocent civilians during the fight against transnational terrorism. To achieve the goal of allowing states to protect their populations from the threat of terrorism while respecting the rule of law and the rights of individuals, it is argued that, while IHL should remain applicable only to armed conflicts it must evolve so that it clearly applies to “transnational” armed conflicts (that is, armed conflicts between State A and a non-state actor based in State B, where State A uses force in the territory of State B without State B’s consent). Rather than recognizing a new third category of armed conflict to cover these situations, it is argued that non-international armed conflicts should be understood as a residual category that regulates all armed conflicts to which the parties are states and/or their agents.