In modern private international law, the principle of the closest connection involves not only the identification of the prevailing territorial connection, but also the consideration of substantive factors (protection of a weaker party, preferability to keep the transaction valid, etc.). The paper substantiates the thesis that, being initially based on the territorial localization of the relationship, the analyzed principle in the course of its development was enhanced with the achievements of others doctrinal approaches to the resolution of the conflict-of-law issue, including the concept of “governmental” or “state” interest developed by American legal scholar Brainerd Currie. A genius breakthrough suggested by B. Currie is examined as an attempt to overcome the mechanical approach of conflict-of-law rules, expand the subject matter field of assessment at the stage of resolving the conflict-o-law issue and, ultimately, evaluate the substantive law result of this decision within the framework of understanding law as a tool for the protection of an individual by the state. Nevertheless, substantive law factors, contrary to one of the main tenets of B. Currie’s teaching, do not replace traditional conflict-of-laws rules at all. To the extent that the conflict-of-law regulation mechanism balances predictability and flexibility of decisions, it complements the search for territorial connection with substantive law considerations. The research makes it possible to conclude that the principle of the closest connection in private international law of the Russian Federation, in the context of global trends in the development of approaches to the resolution of conflict-of-law issues, is complex in nature, as indicated by the explanation of the Plenum of the Supreme Court of the Russian Federation that “when determining the closest connection, the court,” first, establishes ”the prevailing territorial connection” and, second, “may take into account the application of the law of which country will best realize the universally recognized principles of civil law and of its institutions.” As a consequence, it is the combination of territorial and substantive law components in the content of the principle of the closest connection that provides an appropriate balance between predictability and flexibility of the modern mechanism of conflict-of-law regulation.