The August 2008 Russian invasion of Georgia and the unilateral recognition of the independence of Abkhazia and South Ossetia significantly transformed the geopolitical pattern in the South Caucasus in several ways. A significant challenge for regional security issues is the ongoing Armenian-Turkish rapprochement, which could also considerably change the security environment in the South Caucasus. The best alternative to maintain stability in the South Caucasus is regional integration. However, as a result of the unresolved conflicts, markedly different foreign-policy perspectives, and diverse security perceptions of the three post-Soviet states, the South Caucasus has come to be seen as a “broken region.” This paper deals with the political and security issues that significantly overshadow sub-regional, regional and inter-regional relations and examines the key obstacles to forging closer relations with regional players.