Taiwan obtained her membership to WTO on January 1st, 2002. Becoming the organization¡¦s 144th member, some promises have to be made according to the organization¡¦s spirit. Among those promises are divided into tariff reduction, most favored nation treatment to WTO members, and trade liberalization. Meanwhile, Taiwan has to get rid of any trade barrier, tariff related or no tariff related, in order to guarantee fair and free competition in trading. However, impacts are coming to some industries, especially on agriculture and industries they were protected by government and special laws in past time. In Taiwan tobacco industry has being protected by such laws, since Japan¡¦s rule. ROC government has been practicing monopolization on the industry for more 100 years. From tobacco planting, processing, cigarette making, distribution and retailing, all are under such protection by government. Monopoly laws. The purpose of this research aims at understanding the degree of impact on this long protected monopolistic industry under global and liberal competition after Taiwan became a member of WTO. Hopefully, Taiwan tobacco industry can figure out the strategy to deal with severe international competition. This research first makes a discussion about WTO treaty and monopolistic system. After the discussion, information about current tobacco industry in Taiwan and global trend of the industry is used to analyze the overall situation of the industry on the basis of construction competition theory and related research documents. A case study is made on Taiwan Tobacco & Wind Monopoly Bureau. With the view of resource base theory, this research discusses the built resource base during monopolization, and estimates its advantages and disadvantages, and its opportunities and threats under global competition. Then a responsive strategy can be accordingly made. Monopolistic system is to be abolished after the entrance to WTO. Thereafter, Taiwan Tobacco & Wind Monopoly Bureau is going to be reshuffled in July 2002 on its way to privatization. This research can be made a reference to the ongoing strategy and the successors interested in this topic.