The paper provides an analysis of Austro-Hungarian Balkan policy in the 19h and early 20th centuries. As early as the beginning of the 19th century, within the framework of European national movements, the idea of the national liberation and unification of the Serbian people emerged. The primary support for this idea came from Tsarist Russia. Following its defeat in the struggle for German unification under a single state, Austria-Hungary pursued an active Balkan policy. After the occupation of Bosnia and Herzegovina, the development of an even more intensive propaganda campaign concerning “Greater Serbia” began. By promoting the myth of “Greater Serbia,” Austria-Hungary sought to conceal its own occupation of Serbian lands, while simultaneously alarming Europe with so-called Pan-Slavism, which it associated with Russia and its desire to gain access to the Adriatic Sea. Unfortunately, this myth has remained sufficiently persistent to this day.