This chapter presents the background, the main elements and the contradictions of the reform of educational administration in Hungary in the late’ 80s in a Central and East European perspective. It also tries to provide an analysis of the challenges that have emerged with the political changes of the’ 90s. The introductory part of the chapter analyses the differences between policies of decentralization in Eastern and Western Europe. In the second part, the most important changes introduced by the 1985 Hungarian Education Act are summarized, and the policy background of these changes in presented. It is assumed that the policy behind the decentralization measures had a negative character it intended more to abolish the existing structures of control than to establish new ones. In the final part of the chapter those factors are presented which may play a role in the future for or against the policy of decentralization.