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This article challenges the widely-accepted view that Australia's strategic relationship with the USA during the period 1945–69 thwarted the full development of Australian nationhood and, in so doing, formed an obstacle to Australia's accommodation with its region. It argues that the most influential perspectives on the subject place too much emphasis on the 1940s as a watershed in Australian foreign policy history, exaggerate differences between Labor and conservative policies, fail to appreciate that the pursuit of Australian interests was central to Australian policy during this period, and exaggerate the limitations that ANZUS imposed upon Australian freedom of action. Not a thwarted nationalism but flawed understanding of the limitations and possibilities of the US alliance as a vehicle for Australian interests shaped Australian government policies during this period.