The literature on international organizations tells us that diverging member states’ preferences and concerns about the loss of control are major obstacles to institutional reform. But what if changes in the international environment necessitate institutional reform? This article examines such dilemma in the case of the North Atlantic Treaty Organization (NATO). NATO has faced functional pressures to adjust its machinery to the post-Cold War era, but has at the same time seen its membership and the preference heterogeneity of the membership increase. The article finds that institutional change is indeed difficult with multiple principals and uncertainty about the consequences of reform. Yet modest reform has still taken place. Firstly, strong functional pressures can help the member states to overcome their differences concerning institutional reform. Secondly, lower-level incremental reforms, beyond the control of the member states, have made NATO a more efficient organization. The empirical focus is on the development of the understudied International Staff post-1989.