This Deliverable, D3.2 – Channel and propagation modelling and characterization, focuses on the channel modelling for the THz links. The knowledge of the channels is very important when considering application and use case –specific communication solutions and most importantly, when considering link budgets and theoretical capacities. The work consists of theoretical channel models for arbitrary length line-of-sight (LOS) links, as well as measurement-based nonline-of-sight (NLOS) link modelling. The derived models cover the needs of the TERRANOVA communication scenarios. Based on the derived models, the TERRANOVA scenarios defined in WP1 can be tested and analysed. The derived models are also useful beyond TERRANOVA in generic THz research on arbitrary scale communication systems.