The Balkans no longer make international news headlines, and the region’s stability seems to have been consolidated over the past year. Since 1999, Kosovo has been under UN and NATO administration. In 2001, US and EU mediation helped reverse rising tensions in Macedonia, where implementation of the Ohrid accords provides for adequate respect for minority rights. Firm pressure from the EU in 2002 avoided further fragmentation of the rump Yugoslavia and ensured the continued union of Serbia and Montenegro. However, peace in the Balkans is still unstable, as many of the underlying causes of war still persist. This article identifies three instability indicators and examines them in the light of the relatively peaceful developments over the last year. The recent history of conflict in Kosovo and Macedonia reinforced negative imagery constructions between ethnic groups. In addition, continued lack of clarity over the future status of Kosovo creates perceptions of opportunities for power consolidation. If violence is to be ruled out in the Balkans, the international community needs to begin the complex negotiations for Kosovo’s sovereignty, both with the parties concerned and with relevant international actors. A clear perspective in Kosovo will also help stabilize Macedonia and southern Serbia.