After leaving public service, he became a close associate of Jeffrey Epstein, and has worked to bolster contact between the MAGA movement and the European far right, despite previously having been a Labour Party politician in Norway. Norwegian authorities alerted U.S. Epstein investigators in 2019 after reports that Terje Rød-Larsen's think tank, the International Peace Institute, allegedly brought in young and unqualified women from Eastern Europe on very short internships whose photos were shared with Epstein, despite the institute having received extensive Norwegian state funding.

Rød-Larsen described Epstein as "my best friend" and "a thoroughly good human being"

Rød-Larsen and his wife Mona Juul are both under investigation for corruption in Norway related to their ties to Epstein.