In the article, we review recent literature on fiscal sustainability with particular reference to problems that are specific to transition countries. While the original literature on fiscal sustainability chiefly focuses on industrial countries by now a few works have focused on fiscal sustainability in transition countries. Consequently, the article’s purpose is to assess the short-, medium- and long-term sustainability of fiscal policy (under particular assumptions) at the national level in the great majority of transition countries, which we divide into three main groups, i.e. Central and Eastern Europe (CEE), Southern and Eastern Europe (SEE) and the Commonwealth of Independent States (CIS). By using mainstream (primary fiscal gap) theory (proposed by Buiter (1983) and Blanchard (1990)), a non-increasing public debt to GDP ratio is seen as a practical sufficient condition for the sustainability of fiscal policy; a country is likely to remain solvent as long as this ratio is not growing. In this respect the primary fiscal gap, defined as the difference between the required primary fiscal balance to GDP ratio and the actual primary fiscal balance to GDP ratio, is calculatedfor selected transition countries. Based on the mainstream theory measures of fiscal sustainability, the results indicate that fiscal sustainability seems to be a problem in many transition countries, particularly in CEE (e.g. the Czech Republic, Hungary and Poland) and the SEE region (e.g. Albania and Croatia).