Most libertarians believe that death penalty is an extreme exertion of state power and is of little use in a free society, while it is of great use to tyrants. Some libertarians believe that punishment is justified as a deterrent to particularly atrocious crime and dangerous individuals need to be permanently incapacitated.

Many libertarians, including most anarcho-capitalists, believe that penal justice in general should not exist, that only retributive justice is valid. To them, all penalties, such as the death penalty, should be abolished.

On the other hand, libertarians believe in the right and occasional necessity to resort to violence for police purposes; to them, if an outright criminal cannot be otherwise made to stop engaging in criminal behaviour, then they might justifiably be killed.

The death penalty is sometimes seen as a corollary of an individual right to self-defense against a dangerous criminal. However, others argue that to kill a prisoner with premeditation can never be equivalent to fighting back in the heat of an attack.

In any case, to anarcho-capitalists, making judges, policemen and other law enforcement people just as responsible for their acts as any citizen, with no privilege or special right or exemption, will prevent abuse of force in general, and of deadly force in particular.