Salman Rushdie’s work has exponentially engaged with questions of separatism, terror, and terrorism in an aesthetic mode that draws on certain Orientalist and neo-Orientalist tropes. Taking account of geopolitical and local contexts, this chapter focuses on how Rushdie in fiction and nonfiction has responded to separatism, terror, and terrorism at local, national, and global levels. At the core of this discussion is an analysis of Rushdie’s engagement with Kashmir, from Midnight’s Children to Shalimar the Clown and Joseph Anton. By bringing postcolonial critiques of Orientalism into conversation with recent developments in world-systems analysis, the chapter traces the ways in which Rushdie’s representation of the wider geopolitical consequences of terrorism and state-led terror helps to make sense of the war machine of empire in ways that are sometimes obfuscated by Rushdie’s self-fashioning as a secular hero of free speech.