This report reviews the current situation of Bulgaria's vocational education and training (VET) system to identify challenges facing the system and areas needing reform. Section 1 explores the following five aspects of Bulgaria's political and socioeconomic situation: (1) demography; (2) economic developments (privatization of state enterprises, changes in production sectors, role of small and medium enterprises, role of self-employment); (3) social protection and social policy; (4) labor market (employment, unemployment, employment policies); and (5) regional developments. The following four aspects of Bulgaria's VET system are characterized in section 2: (1) organization of education and training (general education and VET at the secondary, postsecondary, and higher education levels); (2) provision of VET; (3) adaptation of VET to socioeconomic change (development of occupational families and profiles, development of new curricula, quality control and recognition of qualifications, career guidance); and (4) shaping VET polity (social dialogue, the industrial relations system, and the involvement of enterprises). Sections 3-9 discuss the following topics: (1) continuing vocational training, adult education, and management training; (2) responsible bodies (characteristics, centralization/decentralization, common standards); (3) legislation; (4) financial support; (5) bilateral and multilateral donors' contributions to VET reform (European Union Phare, World Bank, United Nations, and bilateral projects); (6) VET research; and (7) constraints, challenges, and further needs. The report contains 20 references. (MN)