Abstract The principle of mutual recognition is a cornerstone both of the internal market and of the area of freedom, security and justice. It is, however, not to be misunderstood as a simple or unconditional “miracle solution” for achieving unity despite legal diversity. On the contrary, it has to be seen as a demanding concept, which requires that a difficult balance between freedoms of the individual and legitimate objectives of public interest is struck, and whose successful application, therefore, must be based on certain preconditions and contained within certain limits. In its recent case law, the ECJ has been increasingly faced with the problem of defining such preconditions and limits; interesting results have been achieved, but no clear doctrine has emerged yet. This article analyses the scope of the principle of mutual recognition both under primary and under secondary law. It emphasizes the fundamental difference between the internal market on the one hand, where mutual recognition facilitates freedom, and judicial cooperation in criminal matters on the other hand, where it threatens freedom. The article then looks at three exemplary policy areas (recognition of diplomas, recognition of driving licences and the European arrest warrant) in order to evaluate the recent jurisdiction of the ECJ.