Fiscal support is the lifeblood for the sustenance of threats to internal security. If that support comes from black money and proceeds of crime, then it causes a two-way attack on a country’s national security. On the one side, it provides constant fiscal support to insurgency, separatist tendencies, terrorist activities, etc., and on the other side, it erodes the stability and trust of the national economy. Considering the importance of the nexus between money laundering and internal security challenges, this chapter presents an analysis of the following aspects: introduction to the aspects of money laundering and internal security challenges, including various modes of money laundering and the factors giving rise to the above-mentioned nexus; analysis of the national statutory and executive framework (i.e., under the Prevention of Money Laundering Act (PMLA), 2002) and of the relevant international instruments, including the identification of critical gaps; analysis of case studies establishing a nexus between the aforementioned two illegal activities; analysis of the judicial contribution to the understanding of this nexus; and conclusion of the analysis, as well as suggestions for breaking the above-mentioned nexus.