In the 1950s and 1960s, Taiwan underwent significant land reform that was executed in three primary phases. The first phase in 1949 involved capping agricultural rents at 37.5% of the harvest. The second phase began in 1951 and focused on selling public lands to tenant farmers. The third and final stage commenced in 1953 and centered on breaking up extensive landholdings to redistribute them to tenant farmers, an approach commonly referred to as "land-to-the-tiller."

After the Nationalist government retreated to Taiwan, the Sino-American Joint Commission on Rural Reconstruction oversaw land reform and community development. One factor that made these reforms more palatable was that many of the major landowners were Japanese who had already left the island. The remaining large landowners were compensated with Japanese commercial and industrial assets that had been confiscated after Taiwan returned to Chinese rule in 1945.

Additionally, the land reform program benefited from the fact that the majority of the Kuomintang leadership came from Mainland China and, as such, had limited connections to the local Taiwanese landowners. This lack of local ties made it easier for the government to execute the land reforms effectively.