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The Caucasus has always been a formative region for Russian foreign policy-making. While the North Caucasus has retained its position as Russia’s most fragile and politically instable region, the South Caucasus provided the most pressing security challenges shaping Russian foreign policy since the early nineteenth century. In this article, we argue that the Caucasus comprises a distinct environment that exposes the underlying features of the Russian grand strategy, namely its propensity to hard power and balancing, and yet, at the same time, the fragility of Russia’s position within such a turbulent region. The historical strategic equation with Turkey and Iran has in recent decades been supplemented with a competitive Russia-NATO security dynamic in the Black sea. The threat of possible NATO enlargement in the South Caucasus forces Moscow to draw particular attention to the southern direction of its defences. The situation has become even more complicated with the onset of the Ukraine crisis and Russian engagement in Syria. Historical experience teaches Russia to cease any other foreign policy endeavours until the Caucasus is at peace or at least does not threaten a spill-over of instability. For now, this is a very distant prospect.