Terlouw studied Physics and Mathematics at the Utrecht University simultaneously obtaining Master of Physics and Mathematics degree and worked as a researcher at the FOM before finishing his thesis and graduated as a Doctor of Science in Nuclear physics. Terlouw worked as a nuclear physics researcher at the Massachusetts Institute of Technology (MIT) from February 1960 until April 1962 and for the Royal Institute of Technology (KTH) from August 1965 until December 1966. After the election of 1971 Terlouw was elected as a Member of the House of Representatives on 11 May 1971 and served as a frontbencher and spokesperson for Economic Affairs and Science. After Party Leader and Parliamentary leader Hans van Mierlo announced he was stepping down Terlouw was unanimously selected as his successor on 1 September 1973.