The rise of political Islam in the EU's southern neighbourhood represents a political as well as conceptual challenge to the EU as a foreign policy actor. In the past, the EU reacted to this challenge based on its essentialist perception of political Islam and its overarching interest in regional stability and security. However, the growing salience of ‘contingencist’ interpretations of political Islam and the resolution of the EU's democratisation-stabilisation dilemma in the wake of the Arab Spring have recently provided an opportunity for greater engagement and cooperation. This has enabled a switch in EU policies from a strategy of containment to a strategy of engagement. Despite this, problems remain as the EU continues to expect Islamist actors to adjust to its own discursive framework and as intra-European divisions revive as a result of the renewal of secular-religious divisions in the neighbourhood. This will complicate EU attempts to build a new partnership with Islamist democracies and will fuel old stereotypes and animosities.