Defense reduces the chance of being hit. Each point of Defense reduces the chance to be hit by 1%. In addition, using Suppression to reduce an enemy's chance to hit indirectly increases defense. Some aliens have innate Defense bonuses.

Sources of Defense

Defense comes from armor, smoke grenades, altitude, cover, and abilities.

Cover

Low Cover: +20
High Cover: +40

Abilities

Hunker Down (all): Doubles cover bonus, but reduces sight range.
Tactical Sense (Assault): +5 per enemy in sight (max +20).
Damn Good Ground (Sniper): +10 vs targets on lower elevation (in addition to normal bonuses).
Low Profile (Sniper): Low cover counts as high cover.
- Works only for stationary cover and does not work with low cover bonus provided by the Evasion ability of the Archangel Armor.
Smoke Grenade (Support): +20 to all units in area.
- Dense Smoke: increases Smoke Grenade bonus to +40.
Telekinetic Field (Psionic): +40 to all units in a large area.
Enemy Defense (Alien): +10 to +40 depending on the species and difficulty.

Armor

Notes

Defense provided from cover applies against shots coming from the frontal 180 degree area, a straight line that matches the direction the cover comes from. You can imagine whatever you are covering against extending forever to both sides.
There is no difference at which precise angle the shot comes, all that matters is whether it comes from the front of your line of cover or from behind it (where you are). As long as the shot comes from the other side from where you are, your cover defense bonus applies. If the attacker is on the same side of cover as you, you gain no defense bonus from the cover, and the attacker gains an additional bonus to critical hit because you are Flanked (see Flanking).
Lacking cover (standing in the open or being flanked) provides no bonus or penalty to Defense. (However, it does incur +50% risk of taking a critical hit.) Aliens tend to prioritize uncovered targets in their line of sight.
Being behind scenery, behind another unit, etc. does not influence defense or decrease chance of being hit at all. In a situation when one can see the target, it does not matter if there are several scenery objects or other units in between (Sectopods, cars, debris, etc.) It only matters whether the target has an adjacent cover, and is not considered flanked.
- You can always tell if you have low or full cover when moving based on the shield icon. When it's half filled-in that's low cover, and fully filled in means high cover. If there's no shield on a side, you don't have a line of cover in that direction.
  - If the shield on a square is RED when contemplating a move, or YELLOW on a soldier's current position, watch out! Someone is flanking you!

Countering Defense Bonuses

Enemies with an innate natural defense in high cover are often very difficult, if not impossible to hit. There are several ways to improve your chances counter the defense bonus of a target. Increasing the Hit of the unit, removing the target's cover, or using an ability that ignores the target's cover

Bonuses to Hit

The simplest way to overcome Defense is to increase Aim/Hit. Soldiers automatically gain an increase in Aim for each rank they increase (See Soldiers page for details). Some equipment and abilities also increase Aim. When bringing new recruits along in battle with experienced soldiers, it is often helpful to equip them with these items to increase their chance of scoring a hit and getting experience for kills.

S.C.O.P.E.: +10
Light Plasma Rifle: +10
Holo-Targeting (Heavy): +10 to allies attack vs the same enemy.
Damn Good Ground (Sniper): +10, in addition to height bonus.
Executioner (Sniper): +10 vs targets with less than 50% health.
Height: +20, applies to all targets at a lower elevation.
Pistol upgrade II: +10 when using pistol. Does not stack with Scope.

Removing Cover

Any missed shot from a Laser or Plasma weapon has some chance of destroying cover (conventional bullet firearms are almost useless), but explosive weapons, ie Grenades and Rockets, are the reliable method of removing cover. Mid to late game when the aliens begin fielding stronger troops, grenades are unable to kill them in a single blast and the strength of grenades then becomes their ability to destroy the nearby environment and remove the target's cover bonus.

Another possibility is using the Assault's Flush ability to force the enemy to leave its cover, though a Flushed enemy will only stand in the open if no other cover is nearby to move in to.

Weapons that do terrain damage can also cause volatile objects like vehicles and gas pumps to explode. This usually does not cause them to stop functioning as cover, but it will do considerable damage to anything using it as cover. Normally the object will visibly catch fire and then explode on the next turn, but if enough damage is done to it it can explode immediately.

Attacks that Ignore Defense

These abilities do not use the standard Hit vs Defense mechanic and are best used against targets with a low chance of hit whether because of distance, high cover, or other reasons.

Suppression (Heavy, Support, some Aliens): Target is -30 Aim to all attacks until next turn, provides automatic reaction shot if target moves.
- Danger Zone (Heavy): Suppression affects enemies within 2 squares of the target.
- Mayhem (Heavy): Suppression attacks to do a small amount of damage.
Psionic Attacks: These abilities attack Will instead of Defense so they ignore innate defense bonuses, cover, and distance penalties.
- Mind Fray: 5 Damage. Reduces the target's Aim (-25), Will, and Movement.
Explosives: Rockets and Grenades target a location, not a unit so their chance to hit is not affected by defense.

At higher difficulty levels the aliens will frequently use abilities that ignore defense if they have a low chance to hit any soldiers. In the early game Thin Men will use their poison spit and later enemies will use grenades and other explosives.

Defense (EU2012)

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