Peacetime espionage is often employed by states as a means of acquiring information about competitor states in the international system. However the practice is not limited to competitor states. In a world where security concerns are an ever-present consideration for state action, acts of espionage normally reserved for use against enemies are also used against ally states. The basic premise is that while alliances are able to foster mutual trust and cooperation, they do not conclude that an ally will always be trust-worthy and faithful, most especially, when it involves issues of national interest. The international system and a need to safeguard one’s own interests and population mean that espionage, even against an ally, will remain a necessary state function and all states should therefore remain vigilant against attempts at infiltration of their state secrets. The question of peacetime intra-alliance espionage and the consequences thereof has yet to be answered and it is the purpose of this research to fill that intellectual gap. This research will look at traditionally allied countries, with a long record of cooperation, and not competing states. To achieve this, the case from 2013 of two North Atlantic Treaty Organisation (NATO) allies, Germany and the United States (US), are our main focus. Lessons worth drawing from this, by NATO small states members, shall be discussed.