An emerging amount of research has started to investigate how the terrorist designation of an armed group in intrastate conflict influences a state’s tactics in its counterinsurgency. However, there is a lack of knowledge regarding how this affects the state’s incentives to target civilians. This thesis aims at contributing to this research gap by exploring the question “How does the terrorist designation of an armed group affect the government’s use of violence against civilians?” Rooted in theories of social identity and audience-effects, it is hypothesized that states are more likely to target civilians of the same ethnicity as the rebel group when the group is terrorist designated than when fighting a non-designated group. By using a structured focused comparison, the paper conducts a case study of the government of Turkey and PKK and the government of Sri Lanka and LTTE, before and after the terrorist designation of LTTE and PKK. Findings suggest some support for the hypothesis in the case of Sri Lanka but not in Turkey, calling on future research to explore why different actors respond differently to terrorism designations and what contextual factors may influence this.