The essence, strengths and weaknesses of the accreditation and ranking mechanisms for assessing the institutional capacity and performance of higher education institutions are analyzed and systematically compared in the article. Significant advantages of the ranking over accreditation are proved, as well as the subordination of the second one to the first one, given the leading role of higher education in ensuring and accelerating human progress that has a research-innovative and competitive character. The necessity of urgent introduction, as well as the main stages of practical implementation of the national general and sectoral ranking based on the methodology of the Shanghai ranking (ARWU), are substantiated. It is proposed to use a national ranking for modernization of the national network of higher education institutions. It is argued that accreditation and ranking are fundamentally different mechanisms for assessing education quality with significantly greater possibilities for ranking. Accreditation focuses on the thresholds (minimum) standards and requirements (conditions) and is not suitable for an objective comparative assessment of institutions (educational programmes), taking into account their level of excellence. The rank implies the ranking institutions in the order of their achievements, therefore, in terms of importance and significance, and can be used for relief modeling the landscape of the network of higher education institutions (not only in terms of their territorial or sectoral accumulation, but also in terms of competitiveness). Given this Ukraine with 289 successfully accredited institutions remains a white spot in Europe and the world according to interpretation of the Shanghai ranking of 2018. Unlike accreditation, which, due to limited capabilities, is unable to separate a mass low-order higher education from an innovative high-order higher education, the ranking mechanism reveals the first one as well as the second one. It was clarified that in contrast to providing motivation of obligation (performance) for developing culture of the minimum sufficient quality by accreditation, the ranking forms motivation of encouragement (creativity) for developing culture of the maximum possible quality. The culture of the maximum possible quality under the current conditions of the research and innovation type of progress and competition is a priority because it enhancing competitiveness. In addition, ranking implies the existence of a developed autonomy, able to respond promptly and effectively to the results of the ranking assessment. Autonomy, basically, is non-critical for accreditation. The results of the ranking can be successfully used for accreditation under the conditions of real autonomy, but the conclusions of accreditation for the ranking of institutions – no. Accreditation is inherently affected by a subjective factor, at the same time, ranking (for example, ARWU) can be constructed with the exclusion of a subjective component, with transferring ranking functions to independent artificial intelligence in the future. It has been shown that the research and innovation essence of higher education needs an appropriate valid mechanism of assessment of higher education institutions excellence, which is capable of permanently (for example, annually) to record level of institutions development in view of the ability to predict and project the future of society. Therefore, the trend of the rapid development and spread of international and national rankings is actual. It is argued that the creation of the national ranking of higher education institutions is an urgent objective and should be carried out in several stages: its legislative regulation, the determination of the system of objective indicators agreed by the leading Ukrainian universities (it is advisable to unite them into the leading Association of Ukrainian Universities), organizational and legal, financial support for administration of the ranking (e.g. the National Higher Education Quality Assurance Agency), the annual ranking of institutions and according to its results elaboration and implementation of measures to improve the network of higher education institutions in Ukraine, primarily to consolidate and integrate them.