Albania participated in the Eurovision Song Contest 2016 with the song "Fairytale", written by Olsa Toqi. The song was performed by Eneda Tarifa. The Albanian broadcaster Radio Televizioni Shqiptar (RTSH) organised the 54th edition of the Albanian song competition Festivali i Këngës in order to select the Albanian entry for the 2016 contest in , Sweden. The competition consisted of thirty entries competing in two semi-finals held on 25 and 26 December 2015, followed by a final on 27 December 2015 where twenty-two entries qualified to compete. A seven-member jury panel selected "Përrallë", performed by Eneda Tarifa, as the winner. The song was later translated from Albanian to English for the Eurovision Song Contest and was titled "Fairytale".

Albania was drawn to compete in the second semi-final of the Eurovision Song Contest which took place on 12 May 2016. Performing during the show in position 17, "Fairytale" was not announced among the top 10 entries of the second semi-final and therefore did not qualify to compete in the final. It was later revealed that Albania placed sixteenth out of the 18 participating countries in the semi-final with 45 points.

Prior to the 2016 Contest, Albania had participated in the Eurovision Song Contest twelve times since its first entry in 2004. The nation's best placing in the contest was fifth, which it achieved in 2012 with the song "Suus" performed by Rona Nishliu. Following the introduction of semi-finals for the 2004, Albania had, to this point, featured in seven finals. In 2015, Albania qualified to the final and placed seventeenth with the song "I'm Alive" performed by Elhaida Dani.

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