The United States' sense of its own exceptionalism -- as a perfected New World polity -- has long haunted its foreign relations, pushing it either to remake the world in its own image or to retreat into its own borders. This important reinterpretation of U.S. foreign policy illuminates the tensions, conflicts, and opportunities that flow from this unique national self-image. Nau's ambitious argument is that relations between states are shaped by both power and national identity. Where power is highly unequal and national identities diverge (such as in U.S. relations with countries in the Middle East, Africa, and Latin America), relations tend to be hegemonic. Where power is more equally distributed but national identities diverge (such as in U.S.-Soviet Cold War relations and perhaps in emerging Sino-American relations), balance-of-power politics prevails. But where national identities converge and power disparities are less dramatic (such as in relations between the advanced industrialized democracies), more complex, interdependent, stable, and legitimate relations prevail. Nau offers rich discussions of U.S. foreign policy under these different configurations. His optimistic conclusion is that the spread of capitalist democracy creates a more hospitable world in which the United States can reconcile its self-image with the leadership of a decentralized and well-coordinated global system.