Financial markets are specialized markets within a country where the supply and demand of financial assets takes place. Financial institutions and financial markets play an important role in the development of the economy of every country, including the Republic of Croatia. The financial system of the Republic of Croatia is less developed, the opposite of United States of America. The main task is the development of the financial system and the acquisition of the financial characteristics of the system of the Republic of Croatia. The most important division of the financial market is the money market and the capital market, where financial instruments are traded. Financial instruments are securities which are divided into primary (financial assets, liabilities and equity instruments) and secondary (off-balance sheet items) instruments. Short-term securities are traded on the money market and long-term securities with a maturity of more than one year are traded on the capital market. The aim of this thesis is to present the current situation of the money and capital markets in the Republic of Croatia, to point out the shortcomings and the possibilities of development in these fields.