Nikos Skalkottas, the pioneer of Greek musical modernism, used folk and folk-like musical elements (melodic and rhythmic material) in a considerable number of tonal or atonal works, while employing a great variety of compositional techniques for the exploitation of the embedded folk elements. This paper examines a representative of the category of ‘Theme & Variations’ piano works that, although based on modal Greek folk melodies, are atonal overall. The work examined is the Kurze Variationen auf ein Bergsthema (No. 3 from the 32 Klavierstücke, composed in 1940). The analysis focuses on the following points: the harmonization of the original folk melody for the creation of the theme; its transformation during the variations, while functioning as a melodic and structural core through developing variation techniques; the evolution of the motivic and harmonic material; and the musical texture throughout the unfolding of the variation form. The analysis reveals Skalkottas’s outstanding capacity to fuse traditional formal elements with modern harmonic and transformational techniques, and it correlates this piece with other members of the same category (such as the Thema con Variazioni from the Suite No. 3 for piano and the Eight Variations on a Greek Folk Theme for trio with piano). The paper compares these compositional approaches with those employed in his other atonal variation-type works which are not based on Greek folk tunes (such as the 15 Little Variations and the Passacaglia), thus moving towards the understanding of the principles of Skalkottas’s Variation Form.