Europeanization is a two-way process, which involves the evolution of European institutions that impact on political structures and processes of the Member States. This article develops an approach to link conceptually the two dimensions of Europeanization by focusing on the ways in which Member State governments both shape European policy outcomes and adapt to them. Member States have an incentive to ‘upload’ their policies to the European level to minimize the costs in ‘downloading’ them at the domestic level. But they differ in both their policy preferences and their action capacities. Accordingly, Member States have pursued different strategies in responding to Europeanization. The article draws on evidence from the field of EU environmental policy-making to illustrate when Member States are likely to engage in pace-setting, foot-dragging or fence-sitting. It concludes with some considerations on whether pace-setting, foot-dragging and fence-sitting give rise to interest coalitions, which pitch Member States of diverse levels of economic development against each other.