Malaysia has evolved from a production-based to knowledge-based economy in order to stay relevant and compete in the global marketplace. Thus, the purpose of this article is to discuss current trends in Malaysian higher education and how these affect education policies and practices. Four main trends are discussed in this study: Globalization, Teaching and Learning, Governance, and the Knowledge-Based Society. These are followed by four elements that affect education policy and practices: Employability, Quality Assurance, Academia, and English Language Competency. The transformation that has taken place will surely contribute to the success of Malaysia's Vision 2020 policy of becoming a fully developed nation in the near future.