The South China Sea dispute is one of the focal contentions in contemporary international relations. The dispute revolves around conflicting territorial claims by different states, including China, Vietnam, the Philippines, Malaysia, Indonesia, and Brunei. This thesis explores historical, geopolitical, and economic factors that have shaped these nations' stances and behaviors. It also evaluates the international governance mechanisms in mediating the conflict. The findings indicate that while historical claims and nationalistic fervor would encourage more active territorial assertions, economic interdependencies and regional diplomatic efforts through ASEAN are crucial in shaping the South China Sea's current dynamics and future stability. The thesis suggests that effective negotiation, solid regional cooperation, and adherence to a legally binding South China Sea Code of Conduct are essential for managing disputes and fostering long-term peace and stability in the region. Trade-offs and compromises are also recommended to achieve the objective through ASEAN.