The terahertz time-domain spectroscopy (THz-TDS) was used for sensing and identifying illicit drugs. The absorption spectra of seven illicit drug samples (morphine and its hydrochloride, cocaine hydrochloride, codeine phosphate, papaverine hydrochloride, pethidine hydrochloride, and thebaine) were studied by THz-TDS at 0.3–2.0 THz at room temperature. The geometric structure and vibration frequencies of morphine were calculated by density functional theory. The four absorption features were dominated by intra-/inter-molecular collective or lattice vibration modes. Each illicit drug has a distinct signature in its THz spectra. The results indicate that the THz-TDS can be used to identify and discriminate illicit drugs by their characteristic fingerprints.