In the economic development of Taiwan, the privatization of state-run enterprise has a very important mission in government policy. In the process of Taiwan¡¦s privatization of state-run enterprise, China Steel Corporation (CSC) has plays an essential role among the privatized institutions, and shapes the way and view of the privatization. Past researches were restricted to the enterprise evaluation happened before and after privatization, and stressed the use of the abstract modeling and mathematics, however, the relation between theory and practice has been touched very little in terms of the institutional change of privatization. This study is to explore the privatization of CSC from the perspective of new institutional economics. The methodology used is qualitative approach, which differes from the qualitative approach. The primary approach is document analysis, and supplemented by Gadamer¡uQ&A logic¡v. Under the self-adjustment to the change of internal institution and the adaptation to the change of external environment, the present analysis of CSC privatization, from the perspective of the change of property right and institution, will result in comparative prices change and new transaction profit, and new institution will create some arrangements, inspiration effect, etc. The result of this research can be summarized as two points, which we hope may offer some contributions. 1. From the perspective of property right, the behavior of rent-seeking resulting from the involvement of interest groups during the CSC privatization process may easily cause the phenomenon of increasing transaction cost. Therefore, in the future plan for institutional change, we must consider the institutional environment and strategy to reduce the possibility of that phenomenon. 2. From the perspective of institutional change, the present study analyzed from the imposed institutional change of state-run CSC to the induced institutional change of privatization, and it can give a clear understanding in that the cultural change of enterprise has a critical influence to the institutional change.