After defining the concept of distribution and its place in marketing the author has presented the role of trade in Poland's economy. Then he discusses the channels of distribution, structure and organisation of retail and wholesale trade as well as basic directions of trade policy. We witness a rapid process of concentration and integration as well as modernisation of trade. In the further part of the paper conditions of distribution system functioning have been reviewed and characterised. The reforms introduced in the distribution system aim at increasing the enterprise adaptability to market situations, simplification (rationalisation) of distribution channels and creating premises for employing the active marketing strategy.