As the USA and China vie to shape global space governance, and space technology becomes increasingly accessible, developing space actors like Chile are gaining leverage through strategic cooperative engagements. Chile’s optimal geographical features, advanced democracy, and economic prominence bolster its spacefaring potential and position it as a uniquely strategic partner for the USA and China. However, seizing these opportunities will require Chile to develop a comprehensive National Space Policy (NSP). For the USA, capitalizing on cooperative opportunities demands sensitivity to the intricate relationship between Chile’s domestic development priorities and its space activities. Using a mixed-method approach that combines institutional analysis and literature review, this research analyzes the relationship between Chile’s domestic development incentives, space objectives, and space cooperation preferences. These findings are leveraged for two purposes: the improvement of Chile’s space institutions and the improvement of US space cooperation policy with Chile.