The new government that assumed power in Laos in December 1975 aligned itself with the Soviet bloc and adopted a hostile posture toward the West. In ensuing decades, Laos maintained close ties with the former Soviet Union and its eastern bloc allies and depended heavily on the Soviets for most of its foreign assistance. Laos also maintained a "special relationship" with Vietnam and formalized a 1977 treaty of friendship and cooperation that created tensions with the People's Republic of China.

With the collapse of the Soviet Union and with Vietnam's decreased ability to provide assistance, Laos has sought to improve relations with its regional neighbors. The Lao Government has focused its efforts on Thailand, Laos' principal means of access to the sea and its primary trading partner. Within a year of serious border clashes in 1987, Lao and Thai leaders signed a communiqué, signaling their intention to improve relations. Since then, they have made slow but steady progress, notably the construction and opening of the Friendship Bridge between the two countries.

Relations with China have improved over the years. Although the two were allies during the Vietnam War, the China-Vietnam conflict in 1979 led to a sharp deterioration in Sino-Lao relations. These relations began to improve in the late 1980s. In 1989 Sino-Lao relations were normalized.

Laos' emergence from international isolation has been marked through improved and expanded relations with other nations such as Australia, France, Japan, Sweden, and India. Laos was admitted into the Association of Southeast Asian Nations (ASEAN) in July 1997 and applied to join WTO in 1998.

Laos is a member of the following international organizations: Agency for Cultural and Technical Cooperation (ACCT), ASEAN, ASEAN Free Trade Area (AFTA), ASEAN Regional Forum, Asian Development Bank, Colombo Plan, Economic and Social Commission for Asia and Pacific (ESCAP), Food and Agriculture Organization (FAO), G-77, International Bank for Reconstruction and Development (World Bank), International Civil Aviation Organization (ICAO), International Development Association (IDA), International Fund for Agricultural Development (IFAD), International Finance Corporation (IFC), International Federation of Red Cross and Red Crescent Societies, International Labor Organization (ILO), International Monetary Fund (IMF), Intelsat (nonsignatory user), Interpol, International Olympic Commission (IOC), ITU, Mekong Group, Non-Aligned Movement (NAM), Permanent Court of Arbitration (PCA), United Nations, United Nations Convention on Trade and Development (UNCTAD), United Nations Educational, Social and Cultural Organization (UNESCO), United Nations Industrial Development Organization (UNIDO), Universal Postal Union (UPU), World Federation of Trade Unions, World Health Organization (WHO), World Intellectual Property Organization (WIPO), World Meteorological Organization (WMO), World Tourism Organization, World Trade Organization (observer).

Disputes - international: parts of the border with Thailand are indefinite

Illicit drugs: world's third-largest illicit opium producer (estimated cultivation in 1999 - 218 km², a 16% decrease over 1998; estimated potential production in 1999 - 140 metric tons, about the same as in 1998); potential heroin producer; transshipment point for heroin and methamphetamines produced in Burma; illicit producer of cannabis