This article, providing an example of state support for terrorists, looks at the cooperation between the Stasi and the right-wing West German terrorist Odfried Hepp in the 1980s. Based on research in Stasi archives, the article explains that gathering information, rather than using him as a terrorist weapon in the Cold War, was the main motivator for the Stasi to cooperate with a high-profile neo-Nazi. By looking at the details of the Hepp-Stasi alliance, it assesses what forms, results, and dangers this relationship produced. The article challenges the myth of the all-mighty East German State Security and demonstrates that the dynamics of this alliance were not always in the Stasi's favour. In the absence of other instruments of coercion, the Stasi used the personal relationship between Hepp and his officers to control him. The article offers insights into Hepps's terrorist career but also the pragmatic way in which the Stasi built its network of informants outside the GDR. It also adds nuances to the understanding of the relationship between Socialist states and terrorists during the Cold War.