This thesis is a qualitative research exercise, which tests the explanatory value of the international relations theory of neoliberal institutionalism in explaining Germany's engagement in the Arctic and in the Arctic Council. The research question further attempts to clarify Germany's economic and environmental interests pursued through its engagement with the AC. This thesis analyzes Germany's engagement in the Arctic from a historical point of view up to Germany's contemporary interests. Germany's first Arctic engagement started with the period of whaling, continued through the age of polar heroes, up to the weather war of World War II. After the two World Wars, Germany struggled to restart its Arctic engagement, but nowadays enjoys a high reputation as an Arctic player. This is due to the well-known German polar research institute, the Alfred Wegener Institut Helholtz-Zentrum für Polar- und Meeresforschung, but also due to Germany's engagement in the Arctic Council. As a result of Germany's long history of polar, especially Arctic endeavors, the country became an Observer in the Arctic Council at its founding. As global warming has caused significant melting in the Arctic, Germany's interest has shifted from environmental concerns in the region to a dual emphasis of protecting the environment while pursuing economic opportunities. Today Germany pursues several interests in the Arctic, including economic, political, and environmental interests. Neoliberal institutionalism argues that cooperation can emerge through mutual trust and the building of norms, regimes and institutions. Realism on the other hand emphasizes security competition among great powers within anarchy of the international system, with the main aim to survive. The results of the analysis suggest that the theory of neoliberal institutionalism has better explanatory power for interpreting Germany's motivations for engaging in the Arctic Council than the theory of realism.