The US-led invasion in 2003 created opportunities for Iraq to establish American-style universities. Drawing on policy borrowing and educational transfer theory and using interviews as the primary method of data collection, this study examines how the American-style universities are rationalized and appropriated by various actors at national, sectoral, and institutional levels. The analysis shows that the rationales for establishing American-style universities in post-2003 Iraq differ by how each was funded and politically and financially supported. The new American-style universities in Iraq in this study represented something for both the USA and for Iraq. For the USA, they are a source of public diplomacy and soft power, and for Iraq, an instrument that promises peacebuilding, social cohesion, transition to democracy, reforming the local higher education system, legitimacy, and probably a tool to 'revolutionize' Iraq's higher education and bring back its glory.