On the first electoral defeat of the age-old Kuomintang (KMT) in the year 2000, many predicted its disintegration. However, as the 2004 election unfolded, many forecast its triumphant return. This article identifies the key institutional factors that have kept the defeated party from becoming defunct, and the strategic choice that the KMT leadership has made for its political recovery. The party pursued a reform strategy before forging a pact with like-minded parties, and reestablished its leadership among the alliance of political opposition parties. Lacking a vision and unable to confront the most salient political issue in newly democratized Taiwan, the KMT is suffering an identity crisis and struggling to be a party of the present and the future.
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