On July 24, 2001, a suicide squad from the Liberation Tigers of Tamil Eelam (LTTE) staged an attack on Sri Lanka’s Bandaranaike International Airport and the adjoining air force base at Katunayake. It was known as the most destructive terrorist act in aviation history. Three waves of heavily armed squads (consisting of 14 members of the LTTE) penetrated the security complex and destroyed 26 commercial and military aircraft. This article further described the attack, and analyzed the failure of the Sri Lankan security and intelligence community in preventing the attack. The LTTE attack exposed the shaky foundation of the country’s national security structure and questioned the government’s capacity to develop intelligence, forecast threats, protect its critical infrastructure and prepare appropriate force structures to disrupt LTTE operations in the government-held south. There was also a sharp decline seen in the capability of the Directorate of Internal Intelligence and counter-terrorist intelligence. However, the LTTE had invested 40 percent of its war budget in developing and managing both a civilian and military intelligence organization. Until the Sri Lankan government revamps and restructures its national security organization, the LTTE will be free to step up guerrilla operations in the north and terrorist operations in the south.