The Congressional investigation of the Iran-Contra affair in 1987 focused attention on the worldwide arms trade. In order to understand its significance, it is necessary to examine such trade in the context of international politics. Competition between the two superpowers and the general diffusion of military, political, and economic power from developed to developing countries since 1945 have added new dimensions to arms trafficking. Even though most countries sell arms to make a profit, some, including the United States, sell arms as an instrument of policy. The global sale of arms is characterized by a lack of restraint; the United States is the only major arms exporter that has domestic controls over weapons sales. Case studies of the United States, France, and China analyze the strategic, political, and economic reasons for arms sales. Legal and illegal arms trafficking is examined in relation to volume and distribution, governments and individuals involved, payment modes, real and perceived benefits and profits, and overall political significance. Factors involved in legally selling arms and ammunition are discussed, as well as issues related to high technology weapons transfers, U.S. laws regulating arms sales, and arms trafficking by terrorist organizations. Forms required by the U.S. Government for legal arms trade are appended. 48 references, 5 tables, 9 figures.