Whether the European Union (EU) really lives up to its image of “transformative power” is still an open empirical question. There is no doubt that the EU has been active in setting and promoting norms that go far beyond the objective of regional economic integration. It prescribes and promotes standards for national governance institutions related to democracy, human rights, and the rule of law. However, in comparison to other regional organizations, the EU used to focus on the transformation of domestic governance institutions beyond rather than within its borders, targeting accession candidates, neighboring countries, and third states alike. Only recently did the EU start to develop policies and instruments explicitly aiming to protect the same norms and values within its own member states that it seeks to transfer externally. This paper traces the evolution of the EU’s external and internal governance transfer. While the external dimension is still better developed institutionally, regional integration provides the EU with effective policies and instruments to protect its fundamental values within the member states.