Anderson, a professional journalist, was in the U.S. Marines during the Viet Nam War, where he was a combat correspondent (1969-70). After his discharge he enrolled at Iowa State University, studying broadcast journalism and graduating in 1974. Then he joined the Associated Press, serving in Asia and Africa before being assigned to Lebanon as the chief Mideast correspondant in 1983.
On March 16, 1985, Anderson had just finished a tennis game when he was abducted from the street in Beirut, placed in the trunk of a car and taken to a secret location where he was imprisoned. For the next six year and nine months he was held captive, being moved periodically to new sites. His captors were a group of Hezbollah (Party of God) Shiite Muslims who were supported by Iran in retaliation for Israel's use of U.S weapons and aid in its 1982-3 strikes against Muslim and Druze targets in Lebanon.
Held at the same time were several other Americans, including Thomas Sutherland, an administrator at the American University of Beirut; Frank Reed, head of the Lebanese International School and Joseph Cicippio, deputy controller of the American University of Beirut; Edward Tracey, an itinerant poet; and Professors Allen Steen, [[Jesse Turner]], and Robert Polhill.
At first Anderson was held alone, though he became aware that other captives were also nearby. A lapsed Roman Catholic, he began to reflect upon his life, particularly his past sins. He requested a Bible from his captors and eventually was given one. He said it came as a "gift from heaven," which he read and reread, experiencing a rebirth of his Christian faith.
When he became aware that one of the other captives was a priest, he asked for permission as a Catholic to see the priest to make confession. His wish was granted, and he then met fellow captive, Father Lawrence Jenco, and made his first confession in over 25 years. When he finished both he and Rev. Jenco were in tears as he was granted God's forgiveness.
The hostages were able to spend increasing amounts of time together, which they used in mental games, such as imagining every construction detail of building an imaginary cabin. At times they expected that they would be killed, as some hostages had been. Their captors played mind games with them, such as placing a gun to their heads and acting as if they were about to fire. At other times they were treated more kindly.
At first they kept a calendar by mixing dust and saliva to write on the walls. Later when writing materials became available, Anderson journaled and wrote poetry.
Anderson's sister, Peggy Say, of Batavia, N.Y. became a tireless activist working to obtain his release. Anderson was the last hostage to be accounted for, finally being released December 4, 1991 to a joyful reunion with his family. His daughter Sulome was born three months after his capture and he had not seen her to this point.
Since his release Anderson has been actively involved in freedom of the press issues. He has taught courses at the Columbia Graduate School of Journalism and at the E.W. Scripps School of Journalism at Ohio University. He's also been a frequent talk show guest, a columinst, a radio talk-show host and an activist for charitable causes.
He has written a best selling memoir of his experience as a hostage, entitled Den of Lions.
He filed suit against the Iranian government for his captivity, and in 2002 was awarded a multimillion dollar settlement from frozen Iranian assets. This gave him financial independence, and he retired from his teaching, now living with his wife, Madeleine Bassil, and daughter Salome on a farm in Athens County, Ohio. An older daughter lives in Tokyo, where she is a paralegal.
With some of his settlement, Anderson co-founded the Vietnam Children's Fund, which has built schools in Vietnam attended by more than 12,000 students. He also created the Father Lawrence Jenco Foundation with a $100,000 endowment to honor and support people who do charitable and community service projects in Appalachia. His friend, Father Jenco, who died in 1996, also wrote his memoirs, Bound to Forgive, to which Anderson wrote the preface.
A lifelong fan of blues music, Anderson has also opened the Blue Gator, a blues bar which draws regional and national acts, from Cincinnati's Greg Schaber to Delta blues legend Big Jack Johnson.
In an interview in the spring 1995 newsletter of the School of Journalism Alumni Association, University of Nebraska-Lincoln, by Will Norton Jr., Anderson is quoted:
Is there going to be peace in the world? I’m a Christian. I believe eventually there will be, at the second coming. I think we are moving into an era of greater, or if not peace, at least of greater prosperity.
Think about it: In the last 10 to 15 years there are hundreds of millions of people in the world who are living in a greater degree of individual responsibility and freedom and perhaps dignity than there were 15 years ago. That’s true in eastern Europe, in Latin America, even in Asia.
That great process of history, of thousands of years of an increase in a dignity of the individual, seems to have been halted for a good period of time by the growth of totalitarian societies, and those are breaking up now.
Certainly the totalitarian instinct has not gone away. There are a great many wars going on and struggles by peoples, but that ice jam, that blockage that was representative of the domination of a third of the world by communism, is gone. I think that’s reason for great optimism.
In December, 2003 Terry Anderson announced his candidacy on the Democratic ticket for Ohio state senate's 20th District. The 20th district covers much of southeast Ohio, including all of Washington County.