The world is experiencing a dramatic transformation. Many security challenges, from territorial disputes to climate change, are threatening political stability and economic prosperity in the world. One interesting puzzle in the Asia Pacific is the so-called “Asian exceptional peace” phenomenon, i.e. there has been no military conflict in the Asia Pacific since 1979. By engaging the debate over the “Asian exceptional peace” puzzle, I introduce an “institutional peace” argument, which suggests that Asian countries have constructed an institutional framework of “dynamic security governance” to manage three types of security challenges in the region. I also discuss three future challenges as well as how to sustain this “institutional peace” in the Asia Pacific.