This article examines key aspects of agri-environmental policy and sustainable rural development in Bulgaria within the framework of the Strategic Plan for the Development of Agriculture and Rural Areas 2023–2027 (CAP 2023–2027). The analysis focuses on major interventions related to agri-environmental measures, organic farming, biodiversity conservation, and eco-schemes. Particular attention is given to recent policy developments, including expanded support mechanisms, revised eligibility criteria, and improved administrative procedures aimed at facilitating farmer participation. The article highlights the importance of sustainable land management practices, preservation of local plant varieties and animal breeds, and the enhancement of ecosystem services such as pollination and soil fertility. At the same time, key challenges are identified, including administrative complexity, uneven participation across regions, and the need for stronger institutional coordination. The findings suggest that agri-environmental policy plays a crucial role in shaping the future of rural areas in Bulgaria, not only as a tool for environmental protection but also as a driver of economic resilience and regional development. The study contributes to the existing literature by integrating agri-environmental policy analysis with sustainability transition theory and the ecosystem services framework, offering a multidimensional perspective on rural development. It further advances the understanding of CAP implementation in Eastern European contexts by highlighting the interaction between institutional capacity, environmental objectives, and technological transformation.