Two decades after the war, Bosnia and Herzegovina (BiH) still faces a weak national identity and ethnic and religious divisions that are further preventing the country from reaching sustainable peace and development. The education system is also divided along ethnic and religious lines. This study discusses research questions about challenges BiH has been facing on its way to peace transformation; about relation between the current educational system and development of sustainable peace in BiH; as well as to answer how to achieve positive and sustainable peace in BiH through peace education. In order to offer a peacebuilding framework the study offers an analysis of the role of education and educational programmes (formal and non-formal) in the creation of ethnic identity and peaceful coexistence in BiH since the Ottoman Empire until today. The study relies on interviews with stakeholders from BiH about gaps in the peacebuilding process, education system and suggestions for improvement.