Post-conflict peacebuilding in Iraq started in 2003 following the military invasion by the Coalition of Willing forces. Since 2003, numerous actors have involved themselves in Iraq’s peacebuilding including governments, NGOs, the UN and the international financial institutions. Also, various activities and actions have been implemented in the humanitarian, political and economic domains. Today, all the indicators show that the country still faces the challenges of conflict, chaos as well as weak social and economic development. Many scholars attribute that to the deteriorating security conditions, which raises the questions of why does the country still face insecurity and why has peace not been consolidated? This research examines the impact of donors’ conditionality on post-conflict peacebuilding in Iraq. As the liberal peace is the basis of contemporary practice of peacebuilding, this research draws on the liberal peace theory as a point of departure. The Liberal peace is used as theoretical lenses in order to understand donors’ strategies and arguments in the context of Iraq, according to two main themes, political and economic transition. Overall, this research finds that the donors’ policy packages focused on how to build liberal democratic and a free market state. Donors, primarily the US, aimed at enhancing their control over the political process and formed the political structures according to their interests foremost and not according to the public will. The local community has not been adequately engaged or consulted. Also, transforming Iraq into a free-market economy by relying on the private sector to stimulate economic growth and restricting the role of the state while the country faces security problems has led to weak outcomes in all social and economic sectors.