This article provides an in-depth analysis of the transformation of Cambodia’s higher education system during the early twenty-first century. The study seeks to substantiate the hypothesis that, despite vigorous modernization efforts, the development of the country’s higher education sector remains contradictory, characterized by formal achievements alongside persistent systemic challenges. The research demonstrates that the principal issues facing contemporary Cambodian higher education include relatively low teaching and curricular standards, a weak alignment between academic programs and labor market demands, a shortage of highly qualified academic personnel, and insufficient state funding for universities. It is argued that a number of government initiatives — such as the adoption of a Higher Education Development Strategy, the establishment of an Accreditation Committee, and the expansion of private higher education institutions — are largely declarative in nature and fail to address fundamental structural deficiencies. A significant obstacle to comprehensive modernization is identified as the limited institutional autonomy of universities, which constrains their ability to adapt flexibly to emerging challenges. Furthermore, the analysis highlights that the Royal Government’s focus on bureaucratic oversight of higher education institutions, combined with financial constraints, limits broad access to tertiary education for Cambodian graduates.