Terahertz emission by AlGaAs nanowires grown on a GaAs substrate under excitation by femtosecond optical pulses has been observed. It is demonstrated that THz emission occurs via excitation of photocurrent in the nanowires. The dynamics of photoinduced charge carriers is studied via the influence of an electron—hole plasma on terahertz radiation. It is shown that the capture of charge carriers on vacancies, which exist at the boundaries of nanowires, on the interfaces between cubic and hexagonal phase in nanowires, leads to an increase in the efficiency of terahertz emission.