The role of the state has always been a salient feature of higher education governance in Confucian societies. This is despite that their modern higher education systems have been built upon Western experiences. This article examines the role of the state in invigorating universities in Taiwan in their quest for world-class status. It interrogates university-government relationship in the society with a particular focus on how the premier universities work with the government and how the government maintains its influence through a system of checks and balances. Adopting a case study research approach, data were collected through in-depth semi-structured interviews with administrators and academics at a flagship university and with government officials who are closely associated with the higher education sector. We find that the role of the state remains prominent with decentralised approaches and recentralised government control. This study finally challenges some conventional presumptions about higher education governance in Taiwan.