Implementing international norms is a core aspect of global governance. It raises the question of whether, and through which mechanisms, developments at the international level can influence domestic policymaking. While students of global governance have placed much emphasis on processes of bargaining within international regimes and hegemonic coercion by individual states or international organizations to explain how international agendas reach the domestic level, this paper argues that diffusion constitutes a third and distinct mode of global governance which has not received due attention so far. The paper first outlines the concept of policy diffusion and distinguishes it from other mechanisms of global governance. It draws on theories on the domestic effects of international norms and institutions developed within the field of international relations as well as theories of policy diffusion and policy transfer developed within comparative public policy. Based on an empirical analysis of the international spread of national environmental policy plans and sustainable development strategies, the paper then demonstrates how cross-national imitation and learning matters as a mechanism of implementing the global norm of sustainable development and how these processes of policy diffusion interact with other, more institutionalized, forms of international governance such as unilateral imposition and multilateral harmonization. The paper concludes with general perspectives on the theoretical as well as practical consequences of conceptualizing policy diffusion as a crucial component of global governance and on its potential as a mechanism for implementing sustainable development.