This study examines the policy of Great Britain in Egypt in the context of the changed balance of power in the Eastern Mediterranean. By the mid-1930s, Egypt continued to be one of the key elements of British policy, however by that time the British presence in the country was under threat from opposition forces inside Egypt and from Italy, which more and more clearly demonstrated expansionist tendencies. Along with financial and material limitations, Great Britain was forced to change the way of government in Egypt and resorted to softer approaches. Diplomatic measures were also employed in Anglo-Italian relations. Miles Lampson was appointed high commissioner in Egypt. Upon arrival in the country, he began to study the situation and established a dialogue with various political forces. At the same time, the essence of Great Britain’s policy in Egypt did not change, and the Foreign Office did not consider the possibility of the appearance of alternative political forces here. As for the balance of forces in the Eastern Mediterranean, back in 1934, Italy embarked on an expansionist course in foreign policy. In this regard, the threat to Egypt was considered real by the Foreign Office. However, since Egypt occupied only the third place on the list of foreign policy priorities of Great Britain, the latter launched a policy of “appeasement” toward Italy. Meanwhile, Egypt remained a key element of the British imperial communication system. Finally, when the military threat to Egypt became real, Great Britain concentrated an enormous naval force in the Eastern Mediterranean and provoked the “Mediterranean crisis” of August 1935. While Great Britain demonstrated readiness to resolve problems diplomatically, it was capable of decisive action in crisis situations.