We examine the impact of revenue diversification on the operating performance of 24 commercial banks in Taiwan from 2012 to 2015, using their financial statements in accordance with IFRS (International Financial Reporting Standards). We measure the extent of banks' revenue diversification based on the types their business sectors, which includes consumer and corporate finance, trust management, and financial investments. The empirical evidence shows a positive relationship between revenue diversification and banks' performance. However, earnings fluctuations reduce the benefits of diversified operation in these business sectors. In addition, the diversification of banks' fee-based revenue shows a negative correlation with banks' performance, and this can be attributed to the impact of complex fee-based products.