This chapter focuses on two aspects of the decade-long economic transformation in Central and Eastern Europe since 1989: foreign trade and foreign direct investment. Both aspects are major driving forces in the economic transition. The chapter determines the direction and the extent to which both the changes in foreign trade and foreign direct investment (FDI) impacted the transition of Central and Eastern European countries (CEECs) since 1990. In the case of less developed transition countries, the most important commodity groups in exports are miscellaneous manufactured articles, mineral products, and base metals and products. Data on the industrial sector distribution of foreign investment are available for a limited number of countries. Furthermore, the industrial classifications utilized by statisticians of various host transition economies also differ, thus limiting the scope for comparisons. In all European transition economies, foreign investment is highly concentrated in terms of major source countries.