Cambodia has recently recovered from decades of civil conflict, and remains one of the poorest countries in the region. The current political stability and peace in Cambodia has provided great opportunities for the Royal Government of Cambodia (RGC) to focus on national reconstruction and economic development. The Royal Cambodian Armed Forces (RCAF) is currently at a major crossroads with respect to reforming its forces, which contributes to the government’s grand strategy called the “Rectangular Strategy.” This strategy lists reform of the RCAF as one of the outcomes needed to achieve national strategic objectives. It states that the RGC is strongly committed to military reform with a goal of rebuilding the armed forces to an appropriate size and quality to be able to defend the country in wartime and peacetime. Although the RCAF has achieved its missions very satisfactorily, it faces significant challenges with respect to its reform programs. The purpose of this paper is to identify the major military reform challenges confronting the RCAF and examine the current policy being pursued by the RGC, and then it will propose policy framework options to address a range of current and increasing problems and challenges to RCAF reform.