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The aim of the paper is to explore the transformation in national and ethnic identifications under the change of polity in Taiwan. It is achieved through examining the interaction between the national entrepreneurial categorisation and individual identification in ethnic and national terms. The study is informed by a cognitive perspective which focuses on competition for symbolic power, stereotype and schema, and modes of identity change. It makes a contribution to the limited research on ethnic identification from micro perspective in Taiwan. The main questions of this study relate to the position and transformation of Chineseness in the discursive formation of nation in contemporary Taiwan. It first explores how the distinction between China and Taiwan is framed initially. Seeing how people construe and negotiate their social positions against the shift, the study moves to examine the extent to which they conform to the changed idea of Taiwaneseness, and the ways they locate Chineseness in it.The findings involve two putative Chinese peoples' interpretations of and responses to the narrative transformation of nation. It firstly frames an asymmetrical ethnic relation on the basis of native origin. To re-dress the imposed constraints, the two Chinese peoples translate the frame according to their cultural repertoire, devise different strategies, and seek to get access to the symbolic goods of nation. It is argued that rather than ethnicity being the cause of action, it is the interactive processes that make ethnicity and nation into being. [ABSTRACT FROM AUTHOR]