The purpose of this study is to reevaluate general theoretical and practical interpretation of vernacular architecture in Serbia in the 19th and the first half of 20th century. This incorporates the understanding of vernacular architecture in a wider context, through interpretations of various authors, who do not only observe its design value, but also the cultural and spiritual values. Since vernacular architecture cannot be recognized as a singular discipline, but within the area of many disciplines, the wider interpretation is mandatory. Although celebrated and recognized as archetypal, vernacular architecture in the studied period is fading away and gradually disappears, faced with modern building techniques and architectural styles, brought by formally educated builders. The goal of this study is to examine the processes within which mentioned transformation is occurring and, accordingly, to understand the vernacular architecture which developed in practice. Since vernacular architecture in Serbian historiography has up to now only been examined in the context of traditional rural architecture, or of, so called national style, the main premise of the study is to offer another approach to this kind of creation, so as to examine and critically view the recent dominant understanding of application of vernacular principles and elements in the architecture of the mentioned period.