Universities in Latin America and in the Caribbean (LAC), and throughout the world, are facing one of the most challenging eras in their history. Globalization presents many important opportunities for higher education, but also poses serious problems and raises questions about how best to serve the common good. The traditional values of universities are still valid (autonomy, academic freedom, research, students' work, assessment), but they should be viewed within the context of new global norms. Until the decade of the 80s, public Higher Education (HE) with institutional and academic autonomy, had predominance in the region over the private education. At the end of the 80s and beginnings of the 90s, globalization meant neoliberal strategies. This implied replacing the typical policies of the "Welfare State", for others of reducing funds to public services and privatization of them. These market strategies had an impact in the increasing privatization of HE and in the deterioration of public universities, due to the lack of appropriate financing among other factors. In spite of this, during the 90s HE grew a great deal. HE reforms in LAC in the last two decades, have been oriented towards the satisfaction of an increasing demand according to World Bank policies and in much lesser degree to the policies recommended by the United Nations Educational, Scientific and Cultural Organization (UNESCO) in the World Conference on Higher Education (WCHE) (1998). Because of it, these transformations are mainly counter-reforms and not the needed reform of the national public university. This essay provides an outline of the major challenges facing universities throughout the world. This then gives context to a discussion on current policy reforms and the future of higher education in Latin and Caribbean nations where enrollment and program growth is robust. This includes: cooperation in networks as an alternative to competition; open content and open knowledge versus privatization and marketing visions of new providers of for-profit higher education; new participative instruments of management, evaluation and accreditation; research aimed at global and local needs simultaneously; a sustainable development vision in order to achieve the millennium goals should be incorporated to curriculum as well as studies on multiculturalism and diversity. A bibliography is included. (Contains 10 endnotes.)[Minor changes have been made to this abstract to comply with ERIC guidelines.]