Since 1980, the R&D system in Serbia and Montenegro has passed through several phases, from expansion until 1987 through stagnation in 1987–89, regression until 1995, consolidation and a “waiting” period in 1995–98, falling behind in 1999–2000, and transition starting in 2001. In the last 14 years, the R&D system found itself in a very unstable environment. Consequences of the dissolution of the former SFRY – the economic and political isolation of the country and a war in 1999 (which caused destruction of country's infrastructure), devastation of the natural environment, and an extremely poor economic situation – exhausted the economy and society. These unfavourable conditions formed the starting point for the unavoidable transition of the R&D system. The traditional way of policy- and decision-making, which is predominant in the country and also in S&T, preserves the autonomy that keeps the S&T system detached from other segments of the economy and society. Therefore, transition of the R&D system, aside from the restructuring of R&D organisations, includes a substantial change in long-term planning and the adaptation of EU/OECD best practice in S&T policy creation and implementation in Serbia and Montenegro.