This paper offers a rethinking of the nascence of Egypt’s 1950s foreign policy of positive neutralism, in light of previously untapped Arabic sources. While much attention has been paid to its application in Egypt’s relations with the superpowers, this paper asks: which actors and historical contexts shaped the development of positive neutralism, and to what extent was it a product of the Cold War context? The paper considers the period 1952-1955, from the rise to power of the Free Officers’ movement, to the formal adoption of positive neutralism by (later) President Gamal Abdel Nasser. It argues firstly that Egyptian neutralism did not issue from a stance on the superpower struggle, and certainly not one determined from the outset. Rather it was first articulated in the context of resistance to British colonialism. Secondly, this foreign policy developed in tandem with a nation building project, which was also dominated by an anticolonial rather than Cold War consciousness. Through the positive neutralism case study, this paper proposes that foreign policy and nation building were shaped in tandem by Egypt’s leadership, and cannot be fully understood unless analysed together. Throughout the 1950s, Egyptian leaders negotiated choices between the need for autonomy in foreign policy and for external assistance in developmental nation building. Accordingly, the paper traces the development of neutralism through two phases, within the British colonial and Cold War contexts respectively. First, neutralism was articulated against Britain’s control over the Suez Canal Zone and its regional defence proposals. Egypt practised neutralism by counterbalancing the US and its British ally, sustaining American assistance for a national project seeking to foster national industry, greater social equality, and pan-Arab cooperation. The second phase began in 1954-5, when the Baghdad Pact emerged as the latest Western-sponsored regional security framework, while the US kept assistance conditional on Egypt reaching a settlement with Israel. Opposing this primarily on anticolonial grounds, Nasser now further developed neutralist policy through relations with like-minded African and Asian leaders at the 1954 Bandung Conference. Similarly, it was not bipolarity but an Israeli raid in 1955 which led Nasser to the Eastern bloc in his search for arms, and alternatives to the developmental assistance denied by Washington. These conclusions are supported by analysing diplomatic documents from Egypt’s National Archives, alongside more commonly used British and American state records. The paper also examines politicians’ speeches and memoirs, interviews, as well as print media and radio archives.