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The third "sphere" of Vanguard, Diplomacy, allows a player to influence their faction and to gain benefits for themselves or other players by means other than simply killing large numbers of enemies. As well as obtaining faction, gear and money, one major reward of Diplomacy is Civic Benefits, which are usually in the form of city-wide buffs triggered by city diplomats for the benefit of the crafting, adventuring or harvesting spheres. Diplomats are also expected to play a primary role in Player City Management at a later stage of Vanguard's development.

Diplomacy borrows some elements from collectible card games. A player gradually increases their total reservoir of cards as they advance in level and complete quests. A player must also choose a five card "deck" customized to the needs of each individual "parley".

The Diplomacy encounter is known as a parley. At the beginning of a parley, both players start with a pool of Dialogue Points (the number depending on the encounter difficulty and the player's diplomatic skill). The goal of a parley is to use Statements to influence the diplomacy marker. Every turn the diplomacy marker is on one side of the board, that player's dialogue point total decreases by one. The first to zero dialogue points wins the parley. As the player progresses toward this goal, sentences appear indicating the conversation that is taking place, tying the mechanics of the card game back to role-playing.

Players use this parley mechanism in all the fields of diplomacy, which include Early Diplomacy, Civic Diplomacy, and Missions (Quests).

As a character advances through diplomacy he or she earns titles that can be displayed front of the character name, e.g. 'Messenger' or 'Ambassador'. These titles represent skill levels, not classes. Diplomacy "classes", or areas of specialization, have been mentioned as a possible future design element but are not currently part of the game or planned for the near future.

In addition to skill level, which is gained by performing any Parley, Diplomats must also manage Presence. Presence represents the character's status in a community (called a 'Station') such as Crafters, Outsiders, or Academics. Status accrues slowly by parleying with people of the appropriate station, but the majority of Presence gains come from clothing -- a Diplomat might wear a ragged shirt to raise Outsider Presence or Silk Pants to raise Noble presence.

Performing Parleys usually results in a reward of "information", such as "Rumor of Blackmail" or "Evidence of Trends". When enough of these items have been collected, they can be turned in to Informant NPCs to receive cash, clothing, or items. It should be noted that, at present, no actual information is gained, merely a token in inventory with an appropriate name. That is, receiving a "Rumor of Arcana" will not reveal to the player any additional information about the game world.

As of this time, there is no PVP (Player versus player) element to Diplomacy, but it has been stated that the system was designed with players being able to 'duel' diplomatically with each other. What, if any, benefits or consequences this will have is unknown.