With its high population density and many factories, some areas in Taiwan suffer from heavy pollution. Most notable are the southern suburbs of Taipei and the western stretch from Tainan to Lin Yuan, south of Kaohsiung. In the past, Taipei suffered from extensive vehicle and factory air pollution, but with mandatory use of unleaded petrol and the establishment of the Environmental Protection Agency, the air quality of Taiwan has improved dramatically. Motor scooters, especially older or cheaper two-stroke versions, which are ubiquitous in Taiwan, also contribute disproportionately to urban air pollution.

Though regulation of sulphate aerosol emissions from petroleum production is becoming stringent, acid rain remains to be a threat to the health of the residents and the forests. Scholars in Taiwan point out that more than half of its acid rain is actually brought by monsoon rains from mainland China.

Water pollution from raw sewage and industrial effluents is a significant problem in Taiwan. Outside the larger hotels and urban centres, the water is likely to be impure. Health problems like hepatitis result from water-borne contaminants. Water quality is regulated under provisions of the sanitary drinking water legislation of 1972 and the 1974 Water Pollution Control Act.

Wildlife management is the responsibility of the National Wildlife Protection Association of the Republic of China (Taiwan). The nation's marine life is threatened by the use of driftnets. Endangered species include the Formosan sika, hawksbill turtle, Oriental white stork, and Lan Yü scops owl. Trade in endangered species has been reported.

Because of the intensive exploitation throughout Taiwan's pre-modern and modern history, the island's mineral resources (e.g. coal, gold, marble), as well as wild animal reserves (e.g. deer), have been virtually exhausted. Moreover, much of its forestry resources, especially firs were harvested during Japanese rule for the construction of shrines and have only recovered slightly since then. To this day, forests do not contribute to significant timber production mainly because of concerns about production costs and environmental regulations.