ENLithuania became a full member of the European Union on 1 May 2004 in the context of unprecedented efforts to create a unified European system of qualifications embracing both vocational training and higher education in line with the ambition of developing seamless lifelong learning and increased labour mobility to raise competitiveness whilst promoting social inclusion. The targets established Were difficult enough for the "old" EU 15 given the existence of different systems of vocational training and competing competence models. The targets posed a major challenge for most of the new member states for the same reasons of having invested in particular training systems and competence models but additionally because of particular employment and labour market problems. Lithuania suffers from a low qualification labour force and low employment as a result of the predominance of low surplus value economic activities such as agriculture, textiles and retail, characterised by a lack of innovation and price competition based on low wages. Low wages and few opportunities for upgrading skills encourage individuals with high qualifications to seek employment abroad, increasing skills shortages in Lithuania and preventing employers from adopting high skills strategies to support technological and organisational innovation. Despite the particular challenges of the Lithuanian labour market and the relatively modest size of the economy there has been impressive engagement with European objectives and from the outset a determination to meet European norms in relation to training and qualifications. The conception paper for the key processes involved demonstrates not only the commitment of the team responsible but also the considerable progress made in a relatively short time.In this respect the Lithuania case represents something of a model for Europe’s ambitions to promote transparency and comparability in qualifications systems to support the creation of a single market and facilitate labour mobility. In particular the steps taken to ensure that the Lithuanian system is aligned with the European framework offer a formula for other member states, not only for countries that joined the European Union in recent years. This paper explores the European context and the creation of the European Qualifications Framework (EQF) then outlines the conception of the National Qualifications System (NQS) in Lithuania and the stages and issues involved in its creation. After discussing some of the problems encountered in this work, brief conclusions are offered in relation to apparent good practice in tailoring a qualifications system to meet the needs of a national economy as well as the demands for European compatibility.