This paper discusses how cyberspace has become a venue for terrorists groups for recruiting and proliferating propaganda and terrorism. Moreover, this study explores how the low cost Internet infrastructure and social media sites (such as Facebook, Twitter, and YouTube) have contributed to their networking and operations due to the convenience, in terms of availability, accessibility, message redundancy, ease of use, and the inability to censor content. Concepts such as cyber-weapons, cyber-attacks, cyber-war, and cyber-terrorism are presented and explored to assess how terrorist groups are exploiting cyberspace.