The Habsburg propaganda and advertisment in the Allied camp during World War II, were sporadic concerns that haunted the Yugoslav Royal Government in exile. The article aspires to show overall endeavours of the Government directed towards solving the Habsburg problem, primarily in the sphere of inter – allied diplomatic relations. Beyond that, it represents the continuous fear of restoration of the Austro – Hungarian Empire, in the form of a Danubian federation in the ranks of some national and political groups that were represented in the emigrant apparatus. By analyzing the activities of the representatives of each of the three nations represented in the emigrant apparatus, we can come to the conclusion that they did not have the same views or interests regarding the actions of the Habsburgs. The support that the Habsburg pretender received from the top of the Allied Coalliton only further contributed to the disharmony that existed in the government circles on this issue. The culmination of the support of Allied instances was reflected in the establishment of Free Austrian military unit on the territory of the United States. When American support began to decline, its influence was replaced by Great Britain. The reason for this was the belief of its Prime Minister, Sir Winston Churchill, that a federation or confederation of that type, with its capital in Vienna and the Habsburgs on the throne, would be an obstacle to growing Soviet influence after the war. For almost the same reason, the Vatican and its hierarchy around the world advocated the same solution, striving Емигрантска влада Краљевине Југославије... 150 to save Catholic countries from communist and Ortodox influence. These efforts came to the fore in the final years of World War II. In the first postwar years, Habsburg activities were closely monitored by Yugoslav diplomats, regardless of whether they returned to Yugoslavia or remained in exile.Otto Habsburg’s attempts to get in touch with some of them were also present. But in the decades after the war, he turned to a political career as a member of the European Parliament. In the Yugoslav context, the Archduke became relevant again in the period of the break-up of Yugoslavia, when he lobbied in the international community for Croatia’s independence.