This chapter examines the strategic environment of the US-Australia alliance in the Indo-Pacific era. It discusses the strategic structure of great power competition and also addresses the implications of this structure for the strategies of the players and the outcomes of their game. The transformation of the international architecture will be most salient in the Indo-Pacific region, the core region of China’s rise and the Australia-US alliance. Different perceptions about the propensity of the US-China strategic competition lead to different implications for strategy. One of the strategic objectives of Australia’s 2020 Defence Strategic Update is to shape the country’s strategic environment. Successive US National Security Strategies, at least from the Clinton to the Trump administration, also specify shaping the international environment to protect American interests and advance American values as an overarching foreign policy goal. Effective shaping of the environment is not the same as causing changes or making differences.