Al Qaeda in Iraq (AQI) has suffered a grave setback in the context of its ongoing campaign there. Since late 2006 Sunni tribal militias working in conjunction with Coalition forces have decimated AQI’s ranks, and the organisation has been largely expelled from its former sanctuaries in western Iraq. This article seeks to explain the causes of al Qaeda’s defeat with a view towards drawing out their broader implications for the ongoing struggle against jihadist terrorism. I argue that AQI’s defeat can be ascribed to its ideological inflexibility, its penchant for indiscriminate violence, and its absolute unwillingness to accommodate the sensitivities and political interests of its host communities. Furthermore, I argue that, far from being exceptional, al Qaeda’s mishandling of its local allies in Iraq represents merely the latest instance of a tendency to alienate host communities that has long been evident in its involvement in conflicts in the Islamic world. My analysis confirms that al Qaeda’s ideological extremism constitutes a vital point of vulnerability, and that it remains possible to pry global jihadists away from their host communities even in the context of ongoing high-intensity conflicts.