Governments build walls to curtail a range of illicit activities like immigration, crime, and terrorism. What impact do walls have on the characteristics of illicit activity? We argue that while physical barriers can effectively prevent a narrow category of unwanted behavior, they induce actors to respond strategically and develop new tactics, changing the nature of illicit activity and leading to new threats. We test this argument in the context of Israel's security barrier built to reduce terror attacks. Using an instrumental variable unrelated to the underlying threat of attack, we analyze short-term changes in the barrier's porousness. We ?find that terror attacks in Israel are indeed less likely when the barrier is more secure. However, we also observe evidence of displacement. Attacks and fatalities are most likely immediately after the government eases temporary restrictions on movement, suggesting that previously-planned attacks were delayed, not prevented. Furthermore, when the barrier is more secure, terrorists substitute weapons that are less affected by the barrier, and carry out attacks in systematically different locations. Ultimately, walls' impacts on any challenge depend not just on how well they prevent movement but also on illicit actors' strategic responses.