Conventionally, it has been accepted that the formation of Taiwan results from the collision of the Luzon arc with the Eurasian continental margin. We suggest that Taiwan results from the collision of the Luzon arc with the former Ryukyu subduction zone. Before the collision, the latter extended a few hundred kilometres southwest of its present-day termination. In the early to middle Miocene, the subduction became inactive in its southwest portion and the Manila trench migrated northeastward, giving rise to the formation of the Luzon arc. The collision started in the late Miocene by closing the oceanic domain located between the Luzon arc and the former Ryukyu arc. Because the Luzon arc moved northwestward with respect to the former NE-SW trending Ryukyu arc, the oblique collision first resulted in the indentation on the south Ryukyu arc, west of 123.5°E, and the narrowing of the corresponding portion of the Okinawa trough prior to the uplift of Taiwan. Today, the Hsüehshan and Backbone Ranges represent the uplifted portion of the backarc basin and the Longitudinal valley corresponds to the suture zone between the former Ryukyu and the Luzon arcs. In this model, we propose to link, although they are not of the same age, two truncated backarc basins: the active Okinawa trough to the northeast and the former active Tainan backarc basin to the southwest. The former backarc basin extended from southwest of Taiwan to southern Japan and could have been initiated near the paleo-location of Taiwan as early as the Eocene-Oligocene. The result of the collision is the truncation of the ancient backarc basin associated with the shortening, deformation and uplift of the ancient outer arc and related backarc region, which provides the fundamental mechanism of the Taiwan mountain building. This model is in agreement with a counterclockwise rotation of the portion of Taiwan located west of the Coastal Range (belonging to the Luzon arc) and a clockwise rotation of the south Ryukyu arc. Earthquake focal mechanisms, geodetic observations and the distribution of the petrologic and structural features are also consistent with the proposed arc-arc collision model.