The research explores the political, economic, social challenges and security priorities in state building in Armenia. It examines the government's efforts directed towards state-building, depicting the major challenges involved and exploring the framework of reforms that would measurably contribute to state-building. The study uses a qualitative explanatory research design based on content analysis of literature, interviews, a "roadmap" speech by the former president of the republic and the current government strategic plan. The study then focuses on state building primarily focusing on good governance and associated elements of democracy as prerequisites for a high-functioning state. The findings reveal a relationship between the quality of public institutions and state-building attributing the relatively slower democratization and state building progress to institutional deficiencies in governance. We claim that resolving each of the political, economic and social challenges separately would not lead to state-building. It is important to tackle the root causes of these challenges by focusing on increasing the capacity and efficacy of public institutions guided by the pillars of democracy and good governance.