Abstract: Using the Z transform finite difference time domain method (Z-FDTD), we calculated Terahertz wave's transmission characteristics in plasma sheath, acquired the Terahertz wave power transmission and reflection coefficients with the change of the EM frequencies in the plasma sheath, analyzed the relationship of Terahertz wave transmission characteristics and plasma structure parameters (sheath thickness, collision frequency and the electron density), and discussed the method of using Terahertz wave to solve the "blackout" phenomenon. The results show that Terahertz wave can improve the communication in plasma sheath and provide an effective way to solve the "blackout" problem.