The subject of this paper is the analysis of the process of establishment and organization of public administration during the Austro-Hungarian rule. At the Berlin Congress in 1878, Austria-Hungary was given a mandate by the great powers, with the consent of the Ottoman Empire, to occupy Bosnia and Herzegovina. The occupation brought about various social, military, political, and legal issues that needed to be resolved. In fact, these issues that arose represented the classical domains of state administration, such as the army, police, foreign affairs, justice, and finance. The new authority, represented by the Joint Ministry of Finance, maintained the existing administrative-territorial structure with certain necessary adjustments. Operationally, these tasks were handled by the Bosnian Office, which was superior to the Provincial Government of Bosnia and Herzegovina. The administrative-territorial organization was defined by the decree of the Provincial Government of Bosnia and Herzegovina in 1882, which prescribed that all administrative tasks be carried out in district offices with broad and diverse jurisdiction. It is important to note that the inhabitants of Bosnia and Herzegovina, within the Austro-Hungarian monarchy, had territorial affiliation instead of citizenship, which represented a special legal relationship between individuals and the state. The state administration functioned based on a hierarchical principle of subordination and responsibility, where lower organs were subordinate to higher ones. All general acts of the Provincial Government were previously submitted to the Joint Minister of Finance for approval and only came into force after obtaining such approval. The Provincial Government consisted of four departments: the political-administrative department, the financial department, the judicial department, and the civil department. The departments were headed by heads of departments. The challenges set by Austria-Hungary in the context of establishing a new administrative structure required a state administration with loyal and capable officials. A significant challenge in achieving this goal was the problem of the lack of suitable personnel, both due to the lack of professional qualifications and the departure of a significant number of educated individuals. Considering the demands of modern state administration, good education was required from officials, which, among other things, led to a significant number of officials in both central and local administrative structures being foreigners. They were mostly Austrians, Hungarians, Poles, Czechs, and Slovaks. Many of them stayed in Bosnia and Herzegovina for only a short period, but there were also those who permanently remained. The districts were divided into district offices led by district heads. A special characteristic of the administrative organization was that district offices, to a large extent during the Austro-Hungarian rule, also performed judicial functions. After the occupation, the Austro-Hungarian administration began establishing local self-government. Urban and rural municipalities were formed, and local people participated in their organs. Although municipalities were conceived as units of local self-government, analyzing their scope of authority, it can be determined that they mostly performed delegated tasks of the state administration with a very low degree of autonomy. The public administration operated on a hierarchical principle of subordination and responsibility, within which lower administrative organs were subordinate to higher ones. This paper aims to provide insight into the complexity of administrative organization and structure in Bosnia and Herzegovina during the Austro-Hungarian period. This is significant because during that period, the foundations of modern public administration in Bosnia and Herzegovina were established, encompassing not only state administration but also local self-government and public services.