If successful, the evolution of the African Union (AU) into a Union Government of Africa or the United States of Africa would represent the further institutionalisation of Pan-Africanism. This paper assesses how the notion of Pan-Africanism was first institutionalised as the Organisation of African Unity (OAU) and then the AU. It provides an analysis of the extent to which the AU has transformed its values and principles into practical policies and initiatives. It aalso assesses how the AU has implemented its principles of peace, development and governance, through its peace and security architecture; the New Partnership for Africa's Development (Nepad); and the African Peer Review Mechanism (APRM). The paper concludes that the potential establishment of the Union Government would represent the next phase in the institutionalisation of Pan-Africanism.