This article presents an empirical analysis of the Australian media representation of terrorism using the 2014 Sydney Lindt Café siege as a case in point to engage with the notion of moral panic. Deploying critical discourse analysis and case study as mixed methods, insights into trans-media narratives and aftermath of the terrifying siege are presented. While news media appeared to collaborate with the Australian right-wing government in the reporting of terrorism, social media posed challenges and raised security concerns for the state. Social media heightened the drama as sites were variously deployed by the perpetrator, activists and concerned members of the public. The amplified trans-media association of Muslims with terrorism in Australia and its national and global impact, in terms of the political exclusion of Muslims, are best described in this article in the form of an Islamophobic Moral Panic Model, invented for a rethink of the various stages of its occurrence, intensification and institutionalization.