Oliver E. Williamson, the Nobel Prize in Economic Sciences 2009 Laureate, had a great influence on the new institutional economy development. The lecture is concentrated on his most known research fields i.e. transaction cost and economic governance. It shows clearly the changes Williamson introduced compared to traditional economic theory, as it is necessary if we want to understand his research properly. Then it explains the concepts of institutions and transaction cost. It also illustrates the development of modern firm theory. Why do they exist? How are they organized? Why do they integrate? Finally it describes briefly further development in economic science and practical meaning of Williamson’s research.