A problem of nepotism in the modern Ukrainian society is viewed as one of manifesta- tions and powerful sources of corruption which shows itself as practice of placing one’s relatives, acquaintances, friends or persons within a high-ranked individual’s circle to certain offices without regard to their professional skills and training at other people’s expense.It has been underlined that a destructive result of the nepotism’s personnel policies lies in the fact that unfavourable psychological climate is established among the staff, «un- healthy» organizational set-up is formed, basics of teamwork are ruined, and employees who enjoy no protection lose motivation to fulfill their duties properly; as social lifts are broken, young and talented specialists have no opportunities to be promoted, improve their financial and social status, and this causes migration of an able-to-work, highly-trained portion of the population abroad. The above factors decrease work efficiency of employees in certain teams and lead to deterioration of growth indexes and rates of an institution (establishment, organization, etc.) which ceases developing.Attention is drawn to the fact that immorality and unlawfulness of nepotism manifests itself as ignoring interests of a community (society, state), especially at the state and local levels; as interests of merely a small group of people who are linked through family or mental relations; this causes conflicts between family clans in pursuit of domination over that certain area, and tension in the society. It has been emphasized, that Ukrainian officials justifying themselves by the fact that «tradition» of showing favouritism to relatives and friends is rooted in our people’s minds have made a wide use of practice of nepotism and have turned Ukraine to a «state of developed nepotism» for only twenty-five years. Mani- festations of corruption with nepotism atop enhance as a number of officials increases, that’s why the size of the officialdom which shall not be greater than that established by the European regulations must be controlled.It has been concluded that in order to overcome the problem of nepotism in the Ukrai- nian society, these very personnel policies and similar discriminatory practices which are applied to recruitment in the state’s various agencies must be abandoned, and officials must be punished severely for their wrongdoings starting with the top authorities and administration. For that end, bearing in mind experience of advanced states which made success in their struggle against corruptive phenomena, the society and authorities should focus their efforts on activation of anti-corruption bodies’ work and enhancement of con- trol over compliance with requirements of the Ukrainian legislation in force which sets limits on placement of immediate relatives to senior public offices and promotes prevention of corruption.Establishment of anti-corruption mentality in citizens and strong intolerance of public opinion to any sorts and forms of corruption in all spheres of public life shall be facili- tated through educational institutions and the mass media on the basis of world-recognized educational standards.