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Terre Haute is the location of the Federal Correctional Complex, located on Highway 63, two miles south of the city. The complex includes a medium security Federal Correctional Institution and a high security United States Penitentiary. The penitentiary houses the Special Confinement Unit for inmates serving federal death sentences. On June 11, 2001, Timothy James McVeigh, convicted of use of a weapon of mass destruction in the Oklahoma City Bombing, was put to death there by lethal injection.

Terre Haute is served by the Vigo County School Corporation. The corporation manages 18 elementary schools, 5 middle schools, 3 high schools, and 2 alternative schools. Terre Haute is also home to multiple higher education establishments. Indiana State University (ISU) is located in downtown Terre Haute. It has an enrollment of approximately 12,000. The Princeton Review placed ISU on its Best in the Midwest list of college and universities for nine consecutive years. ISU was also included in the Forbes' "America's Top 650 Colleges." Rose-Hulman Institute of Technology is a private engineering school located just east of the city. The school has been ranked by U.S. News & World Report as the #1 undergraduate engineering school in the nation among institutions whose highest degree in engineering is the master's for 17 consecutive years. The school has an enrollment of approximately 2,200 students on its 200-acre (81 ha) campus. Saint Mary-of-the-Woods College, the nations oldest Catholic liberal arts college for women, was founded in 1840 by Saint Mother Theodore Guerin and the Sisters of Providence. Traditionally a women's college, in 2015 SMWC began accepting applications from men as commuter students. The campus is located on 67 acres (27 ha) of woods in the unincorporated community of Saint Mary-of-the-Woods, between the Wabash River and the Illinois state line. The college is known for its Mari Hulman George School of Equine Studies, which houses 50 horses on campus, as well as its pre-professional programs including pre-veterinarian, pre-law, pre-medicine, pre-dentistry and several niche programs in leadership development, art therapy, and music therapy. Ivy Tech Community College, a full-service community college, and Harrison College are also located in the city.

Terre Haute has been recognized as a Tree City USA by the Division of Forestry for the Indiana Department of Natural Resources since 1999 and also received the Growth Award, which notes a higher standard of excellence for urban forestry management. Indiana State University is one of four Tree Campuses in the state.