The paper is aimed at outlining the main features of the reforms in the agricultural sector and development in Bulgaria from 1989 onwards. This is the period of transition from centrally planned to market economy and the following integration into the European Union (EU). Firstly, the reforms in agriculture during the early transition to market economy in the 1990s are discussed. Further on the reforms in agriculture related to the integration of Bulgaria into the EU are described. Problems and challenges for the agricultural sector in Bulgaria under the conditions of EU membership, including the role of CAP are analyzed. The two periods for financing and development of the agricultural sector in Bulgaria are considered: First programming period (2007–2013) and Second programming period (2014–2020). Finally recommendations are given concerning building competitive Bulgarian agriculture in the conditions of the CAP.