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Support for this research was provided by New York University's Center for Entrepreneurial Studies. The authors thank James W. Dean, Jr., Janet Dukerich, William D. Guth, Ian C. MacMillan, Gerald R. Salancik, Charles Stubbart, and three anonymous ASQ reviewers for their valuable assistance and comments. This paper presents the results of two studies designed to investigate the characteristics of the concepts of threat and opportunity used by organizational decision makers to describe and understand issues. The first study identified the issue characteristics that managers associate with the concepts of threat and opportunity, and the second used an experimental design to demonstrate that the characteristics of issues lead to their being perceived as threats or opportunities. The results suggest the presence of a threat bias, which results in managers being more sensitive to issue characteristics associated with threats than to those associated with opportunities. The implications of the results for understanding how threats and opportunities are identified are discussed, and future research directions are indicated.'