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This paper argues that the character of criminality in post-socialist Lithuania is undergoing a significant change. Up until the mid 1990s criminality was defined by the conflict between the state and criminal groups who challenged the state's authority in the redistribution of state property. Criminal groups used violence to challenge the state's rules and regulations regarding the process and outcomes of privatization. The state responded by legal and institutional reforms leading to militarization and centralization of the police force. Successful legal and police reforms initiated during the early 1990s led to a dramatic decline in organized crime activities. Crime rates also began to stabilize because of the improving socioeconomic situation in the country. As a result, by the mid 1990s the character of criminality began to change. There are signs that it is increasingly associated with the growing social and economic marginalization of those segments of the population, which did not (or could not) adapt to the introduction of competitive markets. The situation was aggravated by a rapid decline of employment within the Lithuanian economy and significant curtailment of social welfare provided by the state. A growing number of individuals, especially males with poor skills and education whose employment opportunities were severely restricted with the decline in manufacturing industries, were dropping out from the labor force even in the presence of jobs; were not marrying; and were increasingly plagued by a variety of social pathologies and health problems including crime, alcoholism, drug abuse, and depression. New forms of entrenched poverty unknown during the socialist era such as vagabonds and homelessness, including homeless children, has now developed and is associated with its apparently inevitable concomitant increased petty criminality.