On April 23, 2008, the European Parliament (EP) adopted the Directive on Certain Aspects of Mediation in Civil and Commercial Matters to facilitate access to dispute resolution and to promote the amicable settlement of disputes by encouraging the use of mediation and by ensuring a sound relationship between mediation and judicial proceedings. The Directive comprises the basic rules to be adopted for the implementation of mediation, stating that the member states will bring into force laws, regulations and administrative provisions as necessary for compliance. As part of adaptation to the EU acquis communautaire, a Draft Mediation Law, which is predicated on the Directive, has been prepared by the Turkish Ministry of Justice and was submitted, in May 2008, to the Parliament for evaluation. The Draft Law has been criticized by some and supported by others; however, concerning the problems associated with the judicial processes in Turkey, the genuine need for quicker, simpler and more cost-efficient methods of dispute resolution is undeniable. This paper begins with a synopsis of the legal background of mediation in Turkey, and then examines the on-going debate on the Draft Law making a comparison between the much debated provisions of the Draft Law and the Directive to determine the extent of compatibility between them concerning issues such as referral to mediation, ensuring the quality of mediation and the enforcement of the settlement agreements to determine the key legal challenges and analyze the context enfolding the rather new "mediation" phenomenon in the Turkish construction industry. An overview of the use and perceptions of mediation in the industry is also given using the qualitative data from a workshop done with the members of the industry, in the quest for making projections to its further development. The findings of this workshop reveals the strong intention of the industry members to move away from the adversarial dispute resolution methods and the openness to adapting mediation and other ADR methods for this purpose. It is concluded that, the Draft Law only determines the main directions and there still is a genuine need to develop effective models for viable implementation of mediation and other ADR methods in the Turkish construction industry, since the lack of institutional framework hinders the wide acceptance despite the growing interest. © RICS.