This study examines the evolution of the European Defense “Identity” (EDI) in the context of the changing security environment of the post-Cold War period. It discusses competing approaches to constructing the EDI, as well as key U.S. goals that bear on U.S. policy toward the EDI. These goals include retaining NATO’s primacy as the forum for security discussions among the Allies and as the exclusive means for organizing the defense of NATO territory, while strengthening the ability of the European Allies to act outside NATO, either as a U.S. partner or independently if the U.S. chooses not to act. The authors recommend a two-pronged strategy: foster NATO’s evolution to maintain its relevance and effectiveness, while seeking to shape the emerging EDI in ways compatible with U.S. interests and objectives. One aspect of this strategy is to accept that the EDI can become the defense arm of the European Community (EC). This would not necessarily harm U.S. interests, so long as the EC does not neglect the security needs of Central and Eastern European countries. As the emerging democracies in Central and Eastern Europe develop links with the EDI, the U.S. should support extending NATO ties as well, including NATO membership to preserve the congruence of the EC and NATO security guarantees.