This article analyses the European Union’s (EU) increased involvement in promoting peace between Armenia and Azerbaijan following the Second Karabakh War in 2020. While the EU’s previous (indirect) engagement was shadowed by its member state France’s cochairing role within the Minsk Group, its recent diplomatic efforts and visibility signify a shift towards more active involvement in the South Caucasus region. This article explores the motivations behind the EU’s engagement, including its political and economic interests in the region. Additionally, the article highlights the challenges that the EU faces in promoting lasting peace in this region. Furthermore, this article provides policy recommendations for the EU to promote peace and stability in the region. These include maintaining a consistent stance against separatism, drawing on its own experience with resolving conflicts within the Union, and increasing its financial investments in trade, infrastructure, and renewable energy production. By following these recommendations, the EU can strengthen its influence in the South Caucasus and promote lasting peace in the region.