The relationship between the United States and Vietnam, the two former enemies, is a topic of great interest. It has taken a long time, almost twenty years since the normalization of relations between the two nations in 1995, for both countries to reach the current stage in their bilateral relations. The U.S.-Vietnam relationship has been increasingly cemented in the context of the contemporary strategic realities of the world, Asia, and the complexity of the South China Sea dispute. However, because of their inherent differences, there are areas both countries need to continue working on for further improvement. This thesis scrutinizes the benefits and challenges for Vietnam as it develops a closer relationship with the U.S. It starts by reviewing the process of establishing and improving the relationship using the DIME model of national power as an analytical framework. The research then examines Vietnams long-term national strategic goals and highlights its national strategic objectives. Analyses of the historic events and bilateral agreements in the U.S.-Vietnam relations reveal the congruence between U.S. interests and policies and Vietnams long-term strategic objectives as well as challenges which must be addressed in order for Vietnam to achieve its strategic objectives. The thesis concludes by highlighting the benefits that would accrue to Vietnam from a closer bilateral relationship in terms of the economy, security, and national defense as well as the challenges posed by the China factor and the differences in political system and perspectives that exist in the Vietnamese and U.S. governments.