The system of higher education in Macedonia is undergoing the largest reform process since the mid-1940s. The context is rather turbulent. Fourteen years after Macedonia's separation from the Yugoslav Federation, this small country now deals with an unstable political situation (the Kosovo question) and awaits an answer from Brussels (expected in November 2005) as to whether it will be accepted as a candidate country to join the European Union [EU]. Macedonia is burdened with a heavy economic recession (unemployment approaches a staggering 40 percent), and is attempting to apply the Bologna Declaration recommendations to restructuring its higher education system, as it became one of the forty-three signatory countries in September 2003. This article demonstrates how all these elements are interdependent. In doing so, it is divided into the following topical sections: (1) Setting the scene: who is who in the Macedonian higher education system?; (2) Enrollment policies; (3) Graduate studies; (4) The structure and functioning of a typical state-funded university in Macedonia; (5) Reforming higher education; (6) Perception of the Bologna Declaration in the Balkans; (7) Reforming Macedonian higher education; (8) The current state of Macedonian education; and (9) Conclusions. (Contains 3 figures and 6 endnotes.)