This thesis aims to analyze the effects of Turkey’s membership candidacy to European Union on Turkish small and medium-sized enterprises (SMEs), with respect to the European Union’s (EU) pre- accession strategy and agenda setting role. After giving the contextualization and modus operandi of enlargement- led Europeanization as well as the EU approach to SME policies, historical analysis is utilized to show the evolution of the Turkish policies on SMEs since the establishment of Turkish Republic. The study reaches a conclusion that, EU candidacy, by means of the accession conditionality and its own agenda, led to changes in Turkish SME policy makers’ perceptions regarding the role of SMEs importance in economy and thus paves the way for the solution of Turkish SME’s chronical problems in the long run