This paper explores the positive and negative effects of transitional justice instruments, such as truth and reconciliation commissions, on the establishment and acceptance of institutions in postwar societies. Every society in transition faces the question of how to deal with past wrongdoings. This question is crucial for the social and institutional settlement. However, there are only few studies and still little understanding about how transitional justice processes influence institution-building. I develop an indicator for measuring social institution-building which refers to the societal acceptance and attitude towards the state and its institutions. Additionally, it includes the reconciliation and social and political trust-building process. The approach is applied to the example of the Peruvian truth and reconciliation commission. I use survey data as well as data collected in interviews in Peru for the analysis. The paper provides new insights on how to enhance sustainable peace, justice and stability in postwar societies.