Ramin Talaie / Getty Images Cadets at graduation ceremonies at West Point, N.Y.

The sun was just rising in a leafy suburb of Tripoli, Libya, as one of the world's most wanted men returned home from morning prayers on Oct. 5. Nazih Abdul-Hamed al-Ruqai, an alleged al-Qaeda operative more commonly known as Anas al-Liby, was slowing his Hyundai Tucson to park on a narrow street when three white cars and a Mercedes van closed in.

Ten men clad in civilian clothes spilled out of the van. Three wore black masks and brandished silencer-equipped pistols. "Get out!" they shouted in Arabic, as one used his gun to smash the driver's window and pulled al-Liby from his vehicle. "What's going on?" al-Liby shouted before going limp, apparently stunned by his assailants.

As he fell unconscious, the man--with a $5 million bounty on his head--probably knew he was falling into American hands. He had been on the run since 2000, when the Justice Department indicted him in the 1998 bombings of two U.S. embassies in Africa that killed 224, including 12 Americans. The masked men dragged al-Liby to the van and pushed him in. They climbed in, slammed the doors and roared away. It was over in a matter of seconds. The U.S. Army's Delta Force had pulled off the daring dawn snatch without firing a shot. "Hooahs!" of approval echoed through Delta headquarters at Fort Bragg, N.C., and in the Army corridors at the Pentagon.

The al-Liby grab was a reminder that the Army, after generations of preparing to fight complicated land wars, is more likely to face enemies that are terrorists, insurgents and other small-bore bad guys than large standing armies. That's going to require bulking up its special-operations forces, shrinking the standing army it has maintained since World War II and re-examining its faith in all kinds of sacred cows. New technologies, new threats and tighter budgets are all conspiring to force the Army to reinvent itself fast. But the service shows virtually no sign of making any of these changes.

As Washington winds down two long and expensive wars (one, in Afghanistan, now entering its 13th year), unpleasant choices are the order of the day at the Pentagon, where the 10% cut required by sequestration is already inflicting budgetary pain. The Air Force may have to ground its A-10 attack planes and KC-10 aerial-refueling tankers to keep money flowing to its fighter and long-range-bomber programs. The Navy fears its fleet of 11 carriers could be cut to as few as eight. And the smallest service, the Marine Corps, may need to shrink by more than 20%, or about 30,000 troops.

But nowhere is the challenge as desperate--or the bureaucracy so resistant to change--as it is in the Army. In an era of targeted drone strikes and ever-more-daring Special Forces missions, the U.S. Army is something of an anachronism. It has 534,000 active-duty troops today and is trying to hang on to 490,000 by 2015. But deeper cuts look likely, and many experts believe the service could shrink to 390,000 by 2023. The Army's core mission is anyone's guess in an era of pilotless drones and spooky commandos. But its generals are slow to face the new reality. "What's the justification for a half-million-man Army?" asks Todd Harrison, military analyst with the independent Center for Strategic and Budgetary Assessments. "The Army doesn't have a good answer for that yet or about why they exist and why they're relevant."

A Service at Sea