After declaring independence in February 2008, Kosovo’s challenges changed from the unifying quest of independence to the realties of establishing a stable and economically viable state from nothing. The challenges are exacerbated by an emerging global economic crisis and increasing pressure on many of the institutions that would be integral to Kosovo’s long term security and success. After briefly reviewing Kosovo’s recent history, this paper examines Kosovo’s performance and progress since independence. Using literature, academic papers, media and NGO reports, and a series of discussions with those involved in the process, as well as independent observers, it considers the legal and diplomatic uncertainties emerging from the declaration itself and assesses the political, economic, justice, rule of law and security pillars and their immediate challenges. The paper concludes that whilst the US still remains committed to the stability and success of Kosovo and the wider Balkans, it is the European Union (EU) which, once it overcomes its own current internal issues, offers Kosovo stability and the best prospects as it strives to emerge as a European nation state.