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Brand alliance, in which two (or more) brands from different firms are presented simultaneously to consumers, is being used increasingly by marketers. Drawing upon brand alliance and sponsorship literature, this study examines two important issues with respect to brand alliance: 1) how does the fit between partner brands influence consumer brand alliance evaluations, and 2) the conditions in which an enhancement or dilution effect of brand alliance on the participating brands is most likely to occur. We address these issues by conceptualizing the fit between partner brands as a two-dimensional construct: expectancy of the partner brand, and relevancy of the partner brand. The results suggest that the fit between partner brands in terms of expectancy and relevancy has a positive effect in relation to consumers' perception of the brand alliance. Moreover, the findings also show that an enhancement effect from the brand alliance to the host brand occurs in a high expectancy and relevancy condition, and a dilution effect occurs in a low expectancy and relevancy condition.