Bolivia traditionally has maintained normal diplomatic relations with all hemispheric states except Chile. Relations with Chile, strained since Bolivia's defeat in the War of the Pacific (1879-83) and its loss of the coastal province of Atacama, were severed from 1962 to 1975 in a dispute over the use of the waters of the Lauca River. Relations were resumed in 1975 but broken again in 1978 over the inability of the two countries to reach an agreement that might have granted Bolivia sovereign access to the sea. They are maintained today at below the ambassadorial level. In the 1960s, relations with Cuba were broken following Castro's rise to power but resumed under the Paz Estenssoro administration in 1985.

Bolivia pursues a foreign policy with a heavy economic component. Bolivia has become more active in the Organization of American States (OAS), the Rio Group, and in MERCOSUR, with which it signed an association agreement in 1996. Bolivia promotes its policies on sustainable development and the empowerment of indigenous people.

Bolivia is a member of the UN and some of its specialized agencies and related programs, OAS, Andean Community, INTELSAT, Non-Aligned Movement, International Parliamentary Union, Latin American Integration Association (ALADI), World Trade Organization; Rio Treaty, Rio Group, Amazon Pact, and MERCOSUR. As an outgrowth of the 1994 Summit of the Americas, Bolivia hosted a hemispheric summit conference on sustainable development in December 1996.