This article discusses some issues related to the Czech currency crisis in May 1997. First, it evaluates the role of different factors which were linked with the crisis. These include the role of monetary and fiscal policy, current account deficit, real exchange rate appreciation, slower growth, political instability as well as possible contagious effects. The second part describes how the crisis evolved, what defence was used by the central bank, and how the pegged regime was abandoned and replaced by the managed float.