This article discusses developments in Western domestic and international Information and Communication Technology (ICT) policy and their implications for the practice of diplomacy, or “cyber diplomacy”. The article describes three phases of domestic and international cyber policy. The first period was characterized by a Western “hands-off” approach, in order to promote free flow of information and innovation. The rising importance of ICT to national security and state interests, civic awareness to privacy on the internet, as well as concerns regarding various ICT market failures, caused a policy shift. Cyber policy and diplomacy 2.0 is an era in which discussions about applying and developing the international rules-based order for the cyber domain was prominent. This called diplomacy to center stage, to deal with geopolitical, technical and social complexities of this field. While some progress was achieved, geopolitical tensions have caused these efforts to be insufficient to promote security and stability on the internet. Meanwhile, domestic policy making activity relating to ICT has had cross-border effects, which have also caused frictions to the ICT ecosystem. This has led to “Cyber policy 3.0”, a policy focused on developing better coordination and cooperation between like-minded states to promote ICT resilience. In order to fulfill the promise of Cyber policy 3.0, cyber diplomacy needs to develop robust interfaces with domestic policy processes and advanced toolsets.