Accession to the European Union has intensified the influx of capital into post-transition countries as a lever for faster achievement of real convergence. Unlike other forms of capital (especially of a short-term nature), foreign direct investment (FDI) has generally been considered a positive source of foreign capital in promoting economic growth and development. However, research has shown that not all forms of FDI (given their sectoral structure) equally contribute to development, and in some cases, their impact can even be negative. On the other hand, the European Union, in its documents, promotes sustainable economic development, and the aim of this study is to create an empirical model of the impact of FDI sectoral structure on the sustainable development of these countries in order to reform FDI attraction policies. Through critical analysis of the literature, variables for the model were selected, with sustainable development as the dependent variable, and the main independent variables being FDI inflows into industry and tourism, the level of economic development, trade openness, and the rule of law index. The study was conducted using panel data for the period 2000-2020, while research on the example of the Republic of Croatia (the impact of FDI in the tourism sector on sustainable development) was conducted using the ARDL model. The obtained results confirm the hypotheses examined in the study, namely that investments in different sectors have different impacts on the economic development of these countries, and it is important to consider the specificities of each sector when planning investments to achieve sustainable development. The validity of the Environmental Kuznets Curve is confirmed using the example of post-transition countries in the European Union, and it is confirmed that FDI inflows into the tourism sector positively affect sustainable development in the Republic of Croatia. The obtained results provide insight into the complex nature of the relationship between FDI and sustainable development and the specificities of sectors in posttransition countries in the European Union.