This paper explores a shift in conceptual paradigms of US public diplomacy from soft/smart power to dialogue-based propaganda. In the first section of the article, the author examines the period of 2009-2012, when Secretary of State Hillary Clinton and her experts in the field of public diplomacy followed Nye's concept of soft/smart power, and conducted the policy of engagement with foreign audiences and the policy of attraction to American values and culture. In the context of wider diplomatic practice, this policy was confirmed by the efforts made by President Barack Obama to improve relations with Iran, Russia, North Korea, and Cuba, and by a new digital diplomacy aimed at empowering civil activists in the Middle East that contributed to the protest movements. In the second section of this article the author examines the period of 2013-2014, when the concept of dialogue-based propaganda, referred to often as the concept of strategic communication, undermined the concept of soft/smart power in American public diplomacy. The concept of dialogue-based propaganda includes more activities of direct traditional propaganda than the concept of soft/smart power and the policy of engagement do. The practical aspect of this conceptual shift is reflected in a current reform of the public diplomacy apparatus and its essence proposed by the US Congress in 2014. Because of the reform, international broadcasting and propaganda became primary instruments of public diplomacy. The author concludes that current American public diplomacy is driven by the concept of dialogue based propaganda rather than the concept of soft/smart power. The following have contributed to the emergence of the paradigm known as the dialogue-based propaganda approach in American public diplomacy: the changes in the community of Washington DC that occurred when Hillary Clinton, who supported and promoted the ideas offered by J. Nye, left the Department of State; the regional crises which unfolded in both the Middle East and Ukraine; and the expanding of international broadcasting in Russia, China, and Iran.