This chapter presents an overview of Mikhail Sergeevich Gorbachev's emerging strategy in domestic and foreign policy by focusing on three themes, namely: the impetus for reform in the Soviet system, the evolution of Gorbachev's reform agenda, the impact of domestic reform on Soviet foreign policy and the prospects for reform. He has therefore centered his efforts on shaping an international environment that will be compatible with domestic reform, and a foreign policy that recognizes the nonmilitary dimensions of security. Gorbachev initially came to power with three reformist priorities: to consolidate his political power; to arrest the deterioration of civic morale, and launch a process of social renewal, and to undertake reforms that would reverse the stagnation and technological backwardness of the Soviet economy and inject a dynamism now largely absent. Eastern Europe constitutes a significant constraint on the prospects for reform in the Soviet Union.