This study aims to present the internal situation in Oman and Omani foreign relations during the second half of the 17th century. This period witnessed some important developments in Omani political history as well as the influence of these developments on the internal and regional situation in the area. This study discusses the important events in Omani history, because it was the period in which Yarubi Imams were able to defy their rivals in the Indian ocean. Moreover, it díscusses the beginning of the modern Oman state. A series of actions were taken by the Imams to develop the administrative and cultural system in the country. The Imams also boosted the economic conditions in the country, through establishing economic relations with European forces. That was reflected on both the social and political aspects. The stages, which the study dealt with can be outlined as follows : 1. Completing the construction of the Omani state. 2. The cultural aspects in that period . 3. Conflict between the Omanis and Portuguese in the Indian Ocean. 4. The Omani Portuguese conflict in East Africa . 5. The relationship between Oman and the European and regional forces in the second half of the 17h century.