A prevailing view at the start of the transition was that education and training systems were among the few creations of the former communist countries that did not need fixing to function effectively in the capitalist world. It became apparent early in the transition, however, that this impression was profoundly mistaken. The accession countries soon encountered problems in maintaining their relatively advanced education systems as output and revenues fell and as ideologically motivated decentralization policies made local governments responsible for managing and financing most schools. At the same time, rising unemployment of graduates signaled a mismatch of education with the evolving skill needs of the competitive economy. In many ways the accession countries face the same challenges as all of the countries in the Organisation for Economic Co-operation and Development (OECD). Globalization and competition are forcing all countries to rethink the role of education and training. The accelerated pace of technological change and evolving markets require a more agile and more adaptable labor force if economies are to remain competitive. Education programs need to do a better job of developing students’ skills in critical thinking and application across the boundaries of conventional disciplines. Opportunities for lifelong learning need to be enriched to develop job-specific skills, to help keep skills up-to-date, and to retool skills for career changes. These challenges are considerably more difficult to meet in the accession countries for two reasons: they require a more radical change from the structure and focus of the former system; and they are exacerbated by the economic and budgetary contraction that accompanied the transition. This chapter examines the education and training challenges facing the accession countries as a result both of the transition and of the broader changes affecting all countries. It focuses largely on changes in formal education at the primary and secondary levels, because it is at these levels that the equityefficiency trade-offs are most acute and that incomplete decentralization policies are hampering reform.