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This paper provides information on vocational education and training (VET) in the Republic of Macedonia in the context of the transition from a centrally controlled economy to a market oriented economy. The paper describes the centralised structure of the Macedonian educational system and discusses perceived challenges for Macedonian VET in the transition context. The paper then reviews the activities of a reform program, the Phare program for VET, introduced in 1998. It is designed to provide modernisation and adjustment of the Macedonian VET system to bring it more into line with the systems of Western Europe. The final section of the paper looks at prospects for the future, with the Phare program expected to provide a framework for an improved VET system, to increase its labour market relevance and to facilitate students' transition from school to work.