The World Trade Organization (WTO) plays a central role in maintaining stability, predictability, and rule-based governance in the global trading system through its dispute settlement mechanism. This article examines the effectiveness, legal structure, and current challenges of the WTO dispute settlement system in resolving international trade disputes. Using doctrinal, analytical, and comparative legal methods, the study evaluates the functioning of the Dispute Settlement Body (DSB), panel procedures, and the Appellate Body. The research highlights both achievements and systemic weaknesses, including institutional paralysis, delays in adjudication, increasing unilateral trade measures, and enforcement limitations. The article argues that although the WTO remains the cornerstone of global trade governance, its dispute resolution system is currently under significant strain. It concludes that comprehensive institutional reform is necessary to restore effectiveness, credibility, and legitimacy in international trade dispute settlement.