The paper analyses the small- and medium-sized enterprise sector in Poland, seeking to answer the question of whether SME development along current lines is sufficient to assure the sustainable development of the Polish economy. Of the many aspects traditionally ascribed to the SME sector, the most important function of these enterprises in Poland seem to be in serving as a cushion against unemployment and increasing social stability. Polish SMEs are weak in innovativeness, have limited exporting power and have small significance in production (of technologically advanced goods). SMEs in Poland have proven to be successful when evaluated against the background of collapsing state-owned enterprises, but their success is partly because of this collapse. SME 'success' appears to be fragile, leading to the need for attention to the instruments of public support for SMEs and their effects on the performance of the sector.