The rule of law and security sector reform have become central to peacebuilding initiatives in the past decade and a half, accompanying a surge in international interventions in the periphery. Considered of critical importance to the re-establishment of order and the promotion of peace and development, these two areas of reform have gained importance and, today, feature as priorities in the European Union’s external action beyond its immediate neighbourhood. Such policies, however, have often failed to achieve their stated goals. After reviewing the theoretical relationship between peacebuilding, rule of law reform and security sector reform, this article draws on the Union’s practice to argue that a narrow, formalistic approach to rule of law and security sector reform, one that prioritises the transplantation of a western liberal legal framework, has undermined the aims of curbing instability and fostering development.