This article presents the main problems in adapting security establishments of democratic countries to the challenges of spreading terrorism in a globalized world. The focus is on problems facing post-communist countries. The author argues that, both during the early stages of democratization and in the ongoing security sector reform, the emphasis is on democratic civilian control and too little attention is paid to operational effectiveness. Furthermore, all democratic countries face the problem of achieving effectiveness of the security organizations while preserving and protecting democratic values. The concept of homeland security, among others, may be used to strengthen international and interagency cooperation in dealing with the security challenges of the Twenty First century.