This study examined the associations between physical and psychological proximity to terrorist attacks and posttraumatic symptoms (PTS), depressive symptoms, and alcohol use among Israeli youth. Self-administered questionnaires were completed under anonymous conditions by 1,150 high and junior high school students (51.3% boys and 48.7% girls) in a town in the Tel Aviv metropolitan area. Standardized, validated scales were used to measure psychological symptoms and alcohol use. High levels of exposure to terrorism were reported. Physical and psychological proximity to terrorist attacks were associated with more PTS symptoms and alcohol consumption. Physical proximity was also associated with symptoms of depression. The implications of terror-associated early drinking for later alcohol problems should be explored.