The heightened threat of terrorism in the West has resulted in more power being granted to police. However, new anti-terror laws and heavy-handed policing practices can stigmatize Muslim communities. Using survey data from 800 Australian Muslims this paper examines whether procedural justice policing in counter-terrorism enhances Muslims’ feelings of social inclusion, and promotes their intentions to report terror threats to police. Of interest is how procedural justice influences Muslims who feel less socially included. Three competing theoretical frameworks differ in the predictions they make about when and why procedural justice influences excluded groups. This paper considers each framework and discusses how each explains the relationships between our variables of interest. Our findings show that procedural justice is positively associated with social inclusion and intentions to report terror threats to police. Findings also show that social inclusion both moderates and partially mediates the effect of procedural justice on reporting intentions.