This article explores L. T. Hobhouse's transformation of liberal internationalism at the beginning of the twentieth century. It argues that Hobhouse's thought contributes to understanding dilemmas within the frame of liberal internationalism and the emergence of international functionalism. Using a philosophical approach, Hobhouse tackled international concerns throughout his life, alongside J. A. Hobson, Gilbert Murray, James Bryce, H. N. Brailsford, Norman Angell, and G. L. Dickinson. He restated a belief in human progress and association in ever-greater circles. But he noted,contraformer hopes, that nationalism furthered democracy only briefly, and that liberal democracy remained incapable of bringing about effective international cooperation and moral universalism. In order to resolve this impasse, Hobhouse suggested substituting political with economic democracy on an international scale. The aim was to create an international functional organisation consisting of vocational and civic associations and states, which would allow individuals to entertain multiple, overlapping, and transnational loyalties. He thus anticipated proposals for global reform that became increasingly popular after the end of World War II. However, in spite of his concern with domestic social equality and his borrowing from international socialism, Hobhouse failed to qualify his internationalism with an analogous interest in equality.