In recent years the region of Eastern and Central Europe has gained a new significance on the international arena. Not only are a majority of its states already NATO and European Union members, but they are also some of the most dedicated U.S. allies in the ?war against terror.? For that reason many policy-makers in both Washington and Brussels have been concerned with the different factors that influence the developments in the region. This paper explores one such factor, which has been crucial historically, and continues to be quite prominent - Russian foreign policy. The project focuses on two aspects of the Russian presence in Eastern Europe - Russian military and strategic policy in response to NATO expansion and Russian influence in the energy sector. In terms of military policy the major factors explored are Moscow?s reaction to the latest wave of NATO enlargement, and the strategic steps taken by the Putin administration in response to this enlargement. On the economic side, the focus is on the Russian subsidiary corporations, energy exports, fuel supplies and equipment provisions to Eastern Europe. The main conclusion is that, realizing its diminished potential for strategic influence, Moscow is moving towards a strengthening and expansion of its economic clout in Eastern Europe. At the same time, the intertwining of politics and economics in Russia implies that such an economic presence may also lead to a certain political leverage on the part of the Kremlin.