The international community has watched Taiwan's first referendum, held on March 20, 2004, with great concern, for fear that it would destabilize the relations across the Taiwan Strait. Less attention, however, has been given to the legal basis of this referendum. This article offers a thorough analysis of Taiwan's Referendum Act and discusses its effects on the status quo which is defined as the situation before any referendum is held. The article distinguishes among various types of referendum institutions, and demonstrates that many articles in the Act actually add more veto-playing forces to the existing political system and thus raises the cost for the status quo to be changed. These impacts on the status quo are diminished, however, by the high passage threshold. Based on this analysis, a concluding section projects the possible ways in which the Act can be revised.