Identification of the entrepreneur's economic function has engaged economists for more than 200 years. In this paper we address the issue of entrepreneurship in two distinct ways: a) as it has historically developed within the field of economics and b) as it develops in the transitional context. In contrast to advanced western economies, productive entrepreneurship cannot be taken for granted in transition countries. Therefore we propose a working definition and model for productive entrepreneurship for transition countries. By means of a literature survey, we further present the main characteristics of entrepreneurship in Central Eastern European and Former Soviet Union countries. Entrepreneurship in Lithuania seems to not fit neatly into these two categories and its specific situation is highlighted.