The European Union’s Artificial Intelligence (AI) Act (Regulation (EU) 2024/1689) marks the world’s first comprehensive legal framework addressing the risks associated with AI. This chapter examines the Act’s origins, core principles, and implementation challenges in the broader context of Europe’s digital policy ambitions. It outlines how the EU’s risk-based regulatory model seeks to balance innovation and fundamental rights protection by classifying AI systems according to their potential risks—ranging from minimal to unacceptable—and imposing corresponding obligations. Particular attention is given to the regulation of high-risk AI systems, the attribution of responsibilities across the AI value chain, and the specific treatment of general-purpose AI models. The chapter also explores the complex interaction between the AI Act and related legal fields, including data protection, copyright, and employment law. While the Act represents a major step toward trustworthy and human-centric AI, its success will heavily depend on effective enforcement, harmonized technical standards, and support for small- and medium-sized enterprises and startups to ensure competitiveness and innovation within the European AI ecosystem while addressing risks. Ultimately, the chapter argues that the AI Act serves both as a milestone and a challenge.