The dynamics of strategic stability in South Asia are facing tremendous challenges. The troubled bilateral relations of India and Pakistan and external influence of the US are undermining the prospects of strategic stability in South Asia. The growing Indo-US nexus is making India an arrogant regional player, who wants to dominate the region at its own terms. Pakistan, in order to maintain a stable deterrent relationship, has been following unilateral strategic restrains and wanted to pursue bilateral strategic restraints to improve wide-ranging confidence building measures with India. A discriminatory and biased approach by the US is making Pakistan vulnerable against Indian hegemonic ambitions. Based on this assumption, the paper argues that the US policies of engagement in South Asia did not help promote strategic stability. However, the US can play a positive role in strengthening strategic stability in South Asia by following an unbiased and balanced approach. This paper is aimed at finding answers to questions related to the nature and impact of the US engagement on South Asian strategic stability, and prospects of the US role to stabilise strategic relationship between India and Pakistan.