The lack of human capital in Portugal has become a key obstacle to higher growth. This paper discusses the performance of education and training services in Portugal and shows that improvements are needed to narrow the significant human capital gap with other OECD countries. Despite progress in the past decades, Portuguese children spend comparatively few years in formal education, and they do not perform as well as children from other OECD countries. Adults, especially the least educated, do not participate enough in lifelong learning and training programmes. This situation does not stem from a lack of resources devoted to education and training but from inefficiencies and misallocation of spending, and weaknesses in the quality of the services that compound the low starting point of Portugal regarding education. Modernizing the Portuguese economy therefore requires a broad reform which increases human capital at all levels. The ongoing efforts of the authorities in the three areas - basic and upper secondary education, tertiary education and adult training - go in the right direction but implementation remains a challenge.