This article offers an interpretation of the current international situation from the perspective of power transition theory. Previous efforts to understand what the end of the Cold War means for international relations have provided only part of the picture. Optimistic views tend to deny the possibility of the emergence of new threats, while pessimistic arguments generally fail to recognize that the prospects for major war have been significantly reduced by the dramatic events of the last half decade. The interpretation offered here is potentially advantageous because it draws insights from a theory with a long record of empirical support. Power transition theory is consistent with the existence of a 'Long Peace' since World War II, with the Cold War's peaceful end, and thus provides confidence to those who would use it to interpret the prospects for the future. The conclusion offered here is that while the end of the Cold War offers reason for celebration, there is also cause for concern.