The article analyzes the theoretical and practical principles of processing samples of folk music. Musical folklore is transformed in composition and performance, including for bandura, by arrangement and its varieties (harmonization, transposition, arrangement, improvisation, etc.). Musical folklore is an integral part of the bandura’s repertoire, presented in the form of vocal-instrumental and instrumental arrangements, as well as instrumental works for solo and ensemble performance. Authentic, classical and modern methods of music processing, as well as creative (author ‘s) and complex approaches are distinguished. The authentic method is inherent mainly in the art of kobzars-bandurists, who were the authors of dumas, historical and other songs and created them simultaneously with the bandura accompaniment. The classical method has been dominant since the second half of the XXth century up until now. The modern approach occurs mainly from the end of the XXth century. The transformation of folklore samples often consists in changing the genre of the original source, the environment of performance, the functional purpose of the work, the appearance of instrumental bandura accompaniment, the change of group singing into solo performance or vice versa. Genres of Ukrainian musical folklore are widely represented in the art of bandura players in Ukraine and abroad. As a result of the analysis of creativity for a bandura of the second hakf of the XX – beg. XXI centuries, in particular artists of the Ukrainian diaspora, it was found that musical folklore to a greater or lesser extent became the subject of works by L. Haidamaka, O. Herasymenko-Oliinyk, Н. Kytasty, R. Levytsky, V. Mishalow, Y. Oliinyk, P. Potapenko , M. Teliga, Z. Shtokalko and others. It is determined that vocal-instrumental arrangements of folk songs, instrumental arrangements of dance music, as well as instrumental works based on Ukrainian musical folklore, occupy an important place in the work of bandura performers and composers in Ukraine and abroad.