This paper seeks to understand the variations in Taiwan-U.S. relations under the Chen Shui-bian administration of the Democratic Progressive Party from 2000 to 2008. It centers on the decision-making process regarding key foreign policy issues and their implications for U.S.-Taiwan relations, and analyzes those processes on four levels-leadership initiatives, bureaucratic influence, domestic politics, and external constraints. The objective is to determine what levels of influence initiate, reinforce, change, intertwine with, and determine the outcomes of policy. Five cases from the Chen administration were chosen for study. The paper explores how the DPP government interacted with the George W. Bush administration on issues related to: A) Chen's announcement of ”two countries on each side of the Taiwan Strait” in 2002; B) the presidential election and the implementation of the so-called ”defensive referendum” in 2004; C) China's passage of the so-called ”Anti Secession Law” (ASL) in March 2005; D) Chen's attempt to abolish the National Unification Council and National Unification Guideline (NUC and NUG) in early 2006; E) Chen's push for a the referendum on joining the United Nations under the name of Taiwan in early 2008. The goal of the paper is to construct a model of a decision-making process for future leaders of Taiwan that weighs as many levels of analysis as possible when making foreign policy decisions in order to get an outcome which balances all consequences.