Higher education system has evolved over generations from students migrating to far off places for learning to the present era of creation of education clusters and education hubs by many countries. This paper explores and analyses the transition of higher education system in United Arab Emirates (UAE) towards internationalisation with the growth of new universities, emergence of diverse programmes, and international collaborations through establishment of branch campuses, making UAE the largest educational hub in the Middle Eastern region. This paper also examines the importance of the reforms initiated by the government and the challenges of the education system to align it with the new economy. The study would be particularly of interest to researchers, academicians in the higher education sector, higher education institutions and policy makers.