This study outlines the background and evolution of the U.S.-Japan security relationship, and discusses the provisions of the revised 1997 U.S. -Japan Defense Guidelines. It also shows how the People's Republic of China (PRC) and the Republic of China (ROC) on Taiwan hold different views of the new security pact. In conclusion, the author suggests that the agreement holds important implications for both Beijing and Taipei, and may help deter aggression and preserve peace and stability in the Western Pacific.