This chapter has the following objectives. The first objective is to examine the historical and theoretical forces that led to the emergence of John Dunning’s eclectic theory in 1976, and its evolution into a paradigm since the mid-1980s. It is argued that both the history of the eclectic paradigm and its evolution over time is a product of dynamic forces of interaction between forces external and internal to the economics discipline. In studying the dynamics of the eclectic paradigm, the study also hopes to examine its relevance as a general framework in explaining changing patterns of international economic transactions, and to suggest some refinements to further enhance the broad appeal of the paradigm to various different theoretical approaches in the discipline of international economics.