The higher education system in vietnam is in a phase of rapid and sustained change. Since 1993, when the fourth plenum of the communist party central committee declared education as a priority area for national investment, the proportion of the relevant age group participating in higher education has increased from 2 per cent to over 13 per cent, and a higher system that was comprised of small, specialised institutions has been transformed into one in which the leading universities are large, multidisciplinary and progressively developing a research capability. The pace of change is likely to intensify over coming years. A higher education reform agenda (resolution 14/2005/nq-cp) adopted in 2005 introduced measures intended to achieve further significant growth and change in the system by 2020. It is expected, for example, that, by 2020, 45 per cent of the relevant age group will participate in higher education, that higher education institutions will be more financially self-reliant and that as many as 40 per cent of all enrolments will be in the non-public (or private) sector of higher education. This chapter presents an overview of the current state of vietnams higher education system. It addresses particularly the challenges involved in trying to develop an internationally competitive system against a background of low per capita national income and a continuing legacy of centralised planning. 2010, Springer science+business media b.V.