This article deals with the Sino–Soviet conflict of 1925–26 over the Chinese Eastern Railway, with special attention given to its background and consequences. In 1924, the Chinese Eastern Railway became a joint venture between the Soviet Union and China, creating fresh friction between the joint Soviet and Chinese managers which culminated in general manager A.N. Ivanov's prohibition on transporting military cargoes and troops, and Ivanov's arrest by Manchurian warlord-general Zhang Zuolin. Some scholars and diplomatists have viewed Ivanov's prohibition and the simultaneous rebellion by Chinese general Guo Songling against Zhang as a Soviet attempt to replace Zhang with a more manageable warlord. But this article argues that although the prohibition—a typical instance of back-and-forth Soviet diplomacy—was a coincidence, it was primarily the result of Soviet ambassador Lev M. Karakhan's tough stance and his rash decision-making, undertaken without seeking advice from Moscow. Zhang's victory in the 1926 clash convinced the Chinese that they had the power to take repressive measures against the Soviet Union's citizens and institutions, which led to the Sino–Soviet conflict of 1929 and exacerbated Japanese alarm over the Soviet's increasing strength in the region. This was to be a factor in the takeover of Manchuria in 1931 by Japan's Guandong Army, which eventually led to global war. This article, therefore, deals with the origins of world-changing events and thus is interesting to Modern Asian Studies’ wider readership.