The financing of vocational education and training (VET) in Portugal was examined. The examination focused on the following topics: (1) the economic, political, legal, and administrative contexts of funding; (2) the funding framework for VET in Portugal; (3) initial vocational training (IVT); (4) continuing vocational training (CVT); and (5) vocational training to address unemployment and social exclusion (UVT). In 1996, funds for IVT, CVT, UVT, and other VET-related activities accounted for 51.0%, 29.8%, 12.7%, and 6.5% of funds spent on VET, respectively. In 1998, funds for IVT, CVT, UVT, and other VET-related activities accounted for 42.0%, 31.0%, 22.3%, and 4.7% of funds spent on VET, respectively. Financing of VET activities in Portugal was strongly dependent on European Social Fund support. The following actions were deemed critical to improving VET in Portugal: (1) increase all VET activities; (2) provide more coherence between the training structure within the educational system, labor market training, and other VET programs; (3) work to increase the private contribution to VET funding, but be mindful of the danger that a large number of enterprises could then reduce their training activities; and (4) encourage a good-quality and flexible system of private sector VET providers. (Fifty-two tables/figures are included. A table summarizing pertinent legal provisions is appended.) (MN)