Algeria has traditionally had a stabilising role in a conflict-torn and unstable region. At a time when Algeria faces considerable political and economic challenges at home, developments, in particular in Libya and the Sahel, have resulted in increasingly complex and transnational security threats. The purposes of this report are twofold. The first is to provide an overview of key aspects of Algeria's history, politics, economy, military, and recent political developments. Second, the report aims to increase the understanding of how Algeria responds to the instability in Libya and the Sahel. It also discusses whether and how Algeria's domestic political and economic turmoil may affect the country's posture in its immediate vicinity in future. The report finds that Algeria uses combined military, diplomatic, and economic means to deal with the deteriorated security situation in Libya and the Sahel. Despite challenging regional developments and domestic changes, Algeria has largely upheld the foreign policy principles that were formed after its war of independence in 1954-1962, such as non-interventionism and non-alignment. Border control and counterterrorism are two prioritised areas. There are currently no indications that this will change in the short term. Yet, continued political turbulence and economic difficulties at home make Algeria's responses to the regional security challenges somewhat more unpredictable in a long-term perspective.