In this article, the challenges and prospects of cooperation between the South Caucasus countries and NATO have been analyzed. The geo-economic, geopolitical and geostrategic importance of the region for both NATO and the Collective Security Treaty Organization (Russia particularly) and reciprocal expectations of further cooperation with the Alliance have been considered. The regional state of affairs in the South Caucasus has been analyzed and the possible impacts of Russian influence on forging closer relations with NATO have been examined. The security environment after the Russo-Georgian war and its repercussions for the South Caucasus-NATO cooperation have been illustrated. NATO’s vested interest in the region to contribute to a European security system for the foreseeable future was brought to the fore. The reasons for the Alliance’s reluctance to actively engage in the region are examined. The recommendations are intended to counterbalance the Russian military presence in the region, without antagonizing the incumbent government in Moscow, and to eradicate the so-called “frozen conflicts” in order to maintain security and prosperity for the South Caucasus region as a whole.