Bulgaria and Romania have signed European Union accession treaties, paving the way for them to join the bloc in January 2007.
People in Bulgaria and Romania have been celebrating the signing
The treaties contain a safeguard clause delaying entry for a year if either country fails to meet EU standards.
The EU wants the independence of the judiciary to be strengthened and more efforts to tackle corruption in what will be its poorest member states.
The signing ceremony took place at the old Neumuenster Abbey in Luxembourg.
If Bulgaria and Romania join in 2007, it will be the fifth enlargement of the EU project, making a total of 27 member states.
In May last year, eight of the 10 new member states were former communist countries.
Bulgaria and Romania missed that first round of EU expansion into eastern Europe because they had failed to implement sufficient democratic and market reforms.
Romania and Bulgaria are poorer than any of the 25 EU states
At the signing ceremony on Monday, European Commission President Jose Manuel Barroso said it had been a "demanding and challenging voyage" and the EU set high standards for new members.
But he told Bulgaria and Romania that the Commission would work with them to overcome difficulties.
"We have every confidence that you are capable of making even most demanding reforms," he said.
The BBC's Nick Thorpe says many governments in western Europe fear an influx of Romanians and Bulgarians and may yet find reasons for delaying full membership.
The reforms that Bulgaria and Romania have already passed into law must now be put into practice.
Courts will have to prove that people receive a fair trial and anti-corruption authorities will have to show that no one is beyond their reach.
The cost of living may rise dramatically as heating bills increase and the withdrawal of state subsidies for less profitable sectors like steel and coal may add to unemployment.
Our correspondent says the leaders of both Romania and Bulgaria will, however, find comfort in the fact that the political will to accept them is now being put into writing.
That should also encourage countries further down the queue in the Balkans, Turkey and Ukraine, he says.