Strategic Environmental Assessment (SEA) has a prominent position in the ongoing search for instruments that can help governments and other organisations to pursue the complex goal of sustainable development. Academic literature and practitioners have devoted increasing attention to this instrument since the late 1980s, and the mid- 1990s have witnessed a surge in legislation and methodological guidance throughout both developed and developing countries. However, the theoretical basis of this instrument remains weak and this thesis contends that the actual reason for its existence (raison d'être) of SEA is inadequately conceptualised. The first stage of the research critically reviews the theory and practice of SEA, identifying tensions, weaknesses and promising trends in the concepts underlying its three dimensions: strategic, environmental and assessment. These show that the idea that there is something 'strategic', whose environmental effects should be assessed - is misleading, as well as simplistic, thus supporting the call for a re-conceptualisation of SEA. The meaning of two common claims (that SEA is to contribute to sustainable development and to the improvement of policy-making processes) in academic and policy literatures is explored in detail. Combining environmental assessment literature with work related to the knowledge perspective of policy-making, policy learning and policy analysis, the thesis then develops a series of propositions for a new interpretation of SEA's raison d'être. These relate to four themes: context, object, purpose and assessment. The second stage seeks to deepen the understanding of the trends and propositions identified, and to verify their relevance in a developing context. Using a range of methods, from interviews to seminars, a case study of Chile - a middle-income country - investigates the interpretation of the purpose and role of SEA according to a range of stakeholders, and in more detail within the Ministry of Public Works. This leads to the proposition, and testing, of a framework that emphasises the need to interpret and operationalise SEA at the level of organisations (such as ministries or multi-lateral development agencies), not of economic sectors alone. It centres on the interactions of the context, the nature of strategic objects, the framing of 'environmental', the purpose of SEA, and the assessment's approach and tools. The most important conclusion is that SEA can only facilitate more environmentally sustainable forms of development, if conventional wisdom about its raison d'être is questioned. This thesis rejects the rhetorical claims in normative interpretations of SEA which identify strategic initiatives, and particularly policies, plans or programmes, as the defining feature of SEA, and the main meaning of its 'strategic' dimension. It proposes that the context, and in particular organisations, should be the focus of a new conception of SEA which seeks to institutionalise rational and argumentative learning as a means to promote environmentally sustainable policy-making. These findings therefore contribute to both the theory and practice of SEA.