This chapter begins by defining sovereign default. It proceeds to untangle several common forms of default, including unilateral and negotiated default, and default that results in principal haircuts and payment reprofiling, and offers a clear taxonomy of default, using real-world examples when needed. The chapter then explores the various costs of sovereign default, and the factors that influence them. It considers some of the weaknesses and distortions within the existing framework of crisis prevention and resolution, highlighting the role of official bailouts and moral hazard, and the causes of delayed and inadequate debt relief (“too little, too late”). The chapter concludes with recommendations for reducing the incidence and cost of default.