Scholars have confirmed the diplomacy value and soft power influence of international alumni (IA), but the relationship between IA and knowledge diplomacy (KD) is under-researched. Meanwhile, there needs to be a change from the soft power framework to the knowledge diplomacy framework in international higher education studies to emphasise mutuality rather than dominance. This study explores the relationship and mechanism of IA and KD by document analysis of Australian governmental policies. This study examines and analyses the Australian international alumni engagement strategy and identifies it as a knowledge diplomacy approach rather than a soft power approach. This study also points out the mechanisms of IA and KD. This study informs the Australian government and other governments worldwide to better engage with their valuable IA groups.