British accession to the European Union (EU) had far reaching economic, political and social consequences for New Zealand, forcing New Zealand to transform itself from a dependent subsidiary of Britain to acting as an independent small state for the first time. Although still in its infancy, the contemporary relationship New Zealand has formed with the EU is quite different to that it first established in the 1970s. It has increasing become more institutionalised, with a slowly developing structural framework that facilitates the narrow areas of cooperation. Dominated by the important economic relationship, the main challenges faced are of an economic nature. But the relationship also encompasses areas of political and social cooperation including people-to-people links, the environment, educational linkages, mutual support for multilateral institutions and development in the Pacific. As a small state, New Zealand is expected to display certain foreign policy behaviours in its interaction with bilateral partners. Small state theory forms the theoretical framework that explains New Zealand's behaviour in its foreign policy interaction with the EU. The theory was chosen for both its perceived usefulness in explaining and understanding the foreign policy behaviour of small states and for the apparent weaknesses of the theory, which is revealed in the case study of New Zealand-EU relations. This demonstrates how the theory is useful for its explanation of small state foreign policy behaviour, but also providing an insightful revelation of the theories flaws. This thesis proposes modifications to small state theory in order to strengthen it, and make it more encompassing of the contemporary realities of small state foreign policy, demonstrating that size does matter when exercising a foreign policy.