In 2016, the EU Global Strategy introduced the ambition of strategic autonomy, referring to the ability to protect the Union against external threats autonomously. To realise this ambition, the EU also launched various capability development initiatives, in particular, the European Defence Fund (EDF). Much of the available literature presents rationalist explanations of the EU’s development of strategic autonomy and the EDF. These studies attribute strategic autonomy ambition to external conditions and consider it as an act of strategic hedging or bandwagoning. However, the subsequent limited progress in actual capability development casts doubt on these explanations. By drawing on historical institutionalism, this study examines the EU’s current approach to strategic autonomy to see whether internal factors would offer an alternative explanation to the disjunction between the ambitions and actions. For this aim, the study scrutinises the evolution of the EDF as an instrument and the role of the Commission as an agent of change. Based on primary and secondary data, the analysis shows that even though external crises have created critical junctures that compel the EU to reorient its goals, the endogenous elements of institutional change have significantly influenced the EU’s choice of means and redistribution of resources. The findings reveal that the Commission’s ability to reinterpret the original rules and exploit gaps and ambiguities in their local enactment in a path-dependent manner has considerably affected the outcome of this change.