This chapter makes several contributions to the extant literature on U.S.-Sri Lanka relations. It argues that America's shift from Liberal Hegemony to Offshore Balancing has transformed its engagement with the island nation. It posits that this shift has led to a recalibration of U.S. priorities, wherein the promotion of human rights and democratic norms has been subordinated to the pursuit of stronger political and economic ties with key Indo-Pacific nations, including Sri Lanka. The chapter also critiques narratives that attribute this shift in U.S. priorities solely to concerns about China, proposing instead that these changes are also part of a broader structural transition in American grand strategy. In addition to advancing this argument, the chapter provides a historical assessment of U.S.-Sri Lanka relations since the island nation’s independence—a lacuna in literature that has yet to be addressed by scholars from either country. By adopting this approach, this chapter not only makes a significant addition to an understudied domain of research but also sheds light on how shifts in great-power grand strategy influence bilateral ties with other nations. Moreover, by contextualizing the U.S.-Sri Lanka relationship within the broader evolution of American grand strategy, it offers a framework for analyzing how small states like Sri Lanka can maximize gains by effectively positioning themselves to benefit from America’s recalibrated priorities and deepening economic and security cooperation with Washington.