Malaysia’s diplomatic relations with Saudi Arabia and Iran generally have been cordial while its economic ties with both countries have been expanding. However, the Saudi-Iran strategic rivalry has intensified both within and beyond the Middle East, raising several questions that this essay proposes to address: What are Malaysia’s interests in Saudi Arabia and Iran? Is there any evidence that Saudi Arabia and Iran, as a function of their competition with each other, are seeking to expand their influence in Southeast Asia, and in Malaysia in particular, through the promulgation of Shia and Wahhabi ideology? If so, to what extent and by what means could Malaysia respond to this development so as to avoid jeopardizing the fruitful aspects of their relations with both countries?