Research into the conditions that cause former adversaries to seek improved relations has missed the interaction of systemic and domestic factors critical to a rapprochement. The United States was able to achieve a rapprochement with China 25 years after fighting a war against it, but has failed to develop normal diplomatic relations with the other adversary from that conflict, North Korea, after nearly 60 years. This study posits that reconciliation is the product of two factors: changing threat perceptions and economic incentives. At the international level, shifts must occur that change how the rivals perceive each other. While this creates conditions for a rapprochement, there must also be economic incentives to drive the two sides together. When both these conditions are present, reconciliation can occur. This theory is examined in two cases where diplomatic normalization with the United States occurred—China and Vietnam—and two cases where it did not—Iran and North Korea. The likelihood of improved relations between the United States and North Korea or Iran is also discussed in light of this theory.