The aim of this study is to assess boundaries and potential for implementation of waste-to-energy projects in developing and transition countries in order to give realistic future directions for waste-to-energy initiatives. For this purpose, Serbia is taken as an example. In order to highlight the most important issues, which hinder the feasibility of waste-to-energy projects, analysis of the status quo of Serbian municipal solid waste management is performed. In addition, based on the current political and social status of the country, the most important factors that need to be solved as a precondition to waste-to-energy projects are defined. This analysis revealed that aside from technical factors, sociopolitical and cultural obstacles must be eliminated as a prerequisite for successful implementation of waste-to-energy projects. We define the most sustainable pathway for waste-to-energy initiatives in Serbia as well as other similar developing and transition countries, which can complement development of the entire waste management system.