In February 1948, Pettus was named as a member of the Communist Party by former head of the Washington Commonwealth Federation Howard Costigan in testimony before the Canwell Committee of the Washington State Legislature. Blacklisted in the McCarthy Era at the start of the Cold War, Pettus became editor of the "People's World", a newspaper associated with the CPUSA. He was charged in 1952 with conspiracy to overthrow the U.S. government, and convicted and sentenced to five years, plus an additional three on contempt charges for refusing to name names. He only actually ever served 60 days, and his conviction was eventually overturned by the United States Supreme Court. Pettus left the CPUSA in 1958. Back in Seattle, Pettus moved onto a houseboat in 1958 and later played a crucial role in saving Lake Union's houseboats and in preventing the city from dumping sewage directly into the lake. In the late 1930s, in Seattle, Pettus edited the Commonwealth Federation's newspaper and hosted the Seattle-area hootenannies (or "hoots"), which Eric Scigliano describes as "fundraising, consciousness-raising, and hellraising parties" for the federation. Pettus had originally learned the word in Terre Haute, where it meant "a party that just sort of happens" without prior planning and brought it to Seattle. When Woody Guthrie and Pete Seeger passed through Seattle, they performed at the hoots; it is believed that they picked up the term "hootenanny" there, and passed it into the broader American vocabulary. Seattle mayor Charles Royer honored him in 1982 with an official Terry Pettus Day, and in 1985, the year after his death, the city dedicated the small Terry Pettus Park on the shore of Lake Union near one of the houseboat neighborhoods.