Egypt under President Abdel Fatteh el-Sisi appears committed to avoid falling into the contentious Sunni-Shia divide by reconfiguring its security considerations based on the recognition of new circumstances that prioritize stability above sectarian and ethnic identity concerns. While Egypt is unlikely to fundamentally alter its foreign policy anytime soon, largely due to its economic dependency on rich Arab countries of the Persian Gulf, its recalibration of relations with Iran has assumed a new level of importance. The growing threat of violent extremism to destabilize the regional order and state-system is undermining old political alliances. This paper provides a systematic attempt to examine the prospects of Egypt’s foreign policy changes and their regional implications, particularly for its economic dependency on Saudi Arabia.