Sister city type relationships at local government level form an important part of Australian-Japanese relations. The original concept of sister cities was to increase international understanding and peace at local level. Over the years, that concept has changed and there is now a robust debate over the inclusion of commercial exchanges into sister city type relationships. This article describes the context of this debate by analysing the different perceptions of sister city type relationships in Australia and Japan. It begins with a discussion of the public policy contexts of sister cities in both Australia and Japan. The second section deals with an analysis of the results of surveys in Australia and Japan. Finally, case studies of two important issues related to SCTRs are discussed: economic and business relations and community involvement. The article concludes by suggesting that sister city type relationships between Australia and Japan are dependent upon the over-arching public policy contexts and sometimes lead to mismatched expectations between the two countries.