The ROC government participated in the 1943 Moscow Conference, the Dumbarton Oaks Conference, and the United Nations Conference on International Organization and was a charter member of the United Nations after participating in the alliance that won World War II. In 1949, the Nationalists lost the Chinese Civil War in mainland China and retreated to Taiwan, Penghu, Kinmen, and Matsu, forming a rump state. Despite the major loss of territory, the ROC continued to be recognized as the legitimate government of China by the UN and by many non-Communist states.

American foreign policy 1950–1971 called for full recognition and support of the government of China in Taiwan. As the Korean War (1950–1953) broke out, Taiwan was not allowed to send military support to South Korea. However, the Truman Administration resumed economic and military aid to the ROC on Taiwan and neutralized the Taiwan Strait by United States Seventh Fleet to stop a Chinese Communist Party (CCP) invasion and a potential ROC counter-invasion of the mainland. In December 1954 a US-Taiwan military alliance was signed as part of the American Cold War strategy in the Far East, in the determination not to allow Chiang Kai-shek's forces on Taiwan to attack China , thereby setting off another even larger war between the United States and China.

The American military presence in Taiwan consisted of the Military Assistance Advisory Group (MAAG) and the United States Taiwan Defense Command (USTDC). Other notable units included the 327th Air Division. Until the US formally recognized the People's Republic of China in 1979, Washington provided the ROC with financial grants based on the Foreign Assistance Act, Mutual Security Act, and Act for International Development enacted by the US Congress. A separate Sino-American Mutual Defense Treaty was signed between the two governments of US and ROC in 1954 and lasted until 1979.

The US State Department's official position in 1959 was:

That the provisional capital of the Republic of China has been at Taipei, Taiwan (Formosa) since December 1949; that the Government of the Republic of China exercises authority over the island; that the sovereignty of Formosa has not been transferred to China; and that Formosa is not a part of China as a country, at least not as yet, and not until and unless appropriate treaties are hereafter entered into. Formosa may be said to be a territory or an area occupied and administered by the Government of the Republic of China, but is not officially recognized as being a part of the Republic of China.

In the past decades, the US had maintained a position to not support Taiwanese independence, and instead to have a One China policy that's guided by the Taiwan Relations Act, the three U.S.-China Joint Communiques, and the Six Assurances, and to expect cross-Strait differences to be handled peacefully, and oppose any unilateral changes to the status quo from either side.
In 1971, the UN expelled the ROC and transferred China's seat to the People's Republic of China (PRC). In addition to the ad tempus recognition of the ROC by a majority of countries before UN Resolution 2758, the ROC lost its membership in all intergovernmental organisations related to the UN. As the UN and related organizations like the International Court of Justice are the most common venu…

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The ROC's GDP was ahead of several G20 economies before 2012.
As a non-member state of the United Nations, by participating as members in one or more United Nations Specialised Agencies and operating in a parallel political system with the CCP as in the case of Germany and Korea, the ROC may be granted a Permanent Observer status in organisations such as the IMF and World Bank.

Involvement and participation in the Asia Pacific Innovation Conference allows interaction with the Director of Economics and Statistics Division of WIPO, who directly reports to the Director-General.
Due to "the absence of a cross-strait understanding" (1992 consensus), the ROC has encountered international isolation due to political and economic pressure from the PRC since the 1970s, and it has continued under the pro-Taiwan independence administration of the Democratic Progressive Party. Taiwan is not allowed to attend World Health Assembly, Interpol, International Civil Aviation Organization, or the United Nations' Kimberley Process Certification Scheme. Other forms of international isolation include measures against the activities of Chinese Taipei Olympic Committee, Golden Horse Film Festival and Awards (boycotted), and a ban on Taiwan journalists to acquire passes to United Nations and as well as UNFCCC meetings.

Analysts argue that PRC's coercive strategy might have proven counterproductive as it has further united US allies (including Australia and the UK) in their response which in turn makes it more challenging for Beijing to achieve its intended geostrategic objectives.

The ROC's (multi-sector) civil society currently participates in 11 projects of United Nations Sustainable Development Goals. ROC ranks 31st of 176 countries and territories in the 2016 Transparency International's Corruption Perception Index.

In the 1970s many countries switched diplomatic recognition from the ROC to the PRC, including the United States, Japan and Canada. In October 1971, Resolution 2758 was passed by the UN General Assembly, expelling "the representatives of Chiang Kai-shek" and transferring China's seat on the Security Council to the PRC. The resolution declared that "the representatives of the Government of the PRC are the only lawful representatives of China to the United Nations." However, the eo ipso nature of Taiwan and weapons of mass destruction remained a contentious issue.

Many attempts by the ROC to rejoin the UN have not made it past the committee, due to PRC opposition and threats of veto. President Chen Shui-bian argued that Resolution 2758, replacing the ROC with the PRC in 1971, addressed only the question of who should have China's seat in the UN rather than whether an additional seat for the Taiwan Area could be created to represent the 23 million people residing in the Taiwanese mainland and other islands.

Since the 1970s, the PRC and ROC have competed for diplomatic recognition from nations across the world, often by offering financial aid to poorer countries as an inducement. As a precondition for diplomatic relations, the PRC requires that the other country renounce any recognition of the ROC. Since the introduction of the "pragmatic diplomacy" (務實外交; Wùshí wàijiāo) policy in 1991, the ROC has not insisted on consideration as the sole representative of China, and does not require nations that recognise it to end their relations with the PRC. For example, when Saint Lucia chose to recognise the ROC in 2007, Foreign Minister Rufus Bousquet said the decision "should not be construed as a severance of our relationship with the PRC". However, the PRC responds to foreign recognitions of the ROC by suspending relations with the other country.

On less official terms, the ROC is involved in South China Sea disputes over control of the Spratly Islands with China, Malaysia, the Philippines, Vietnam, and Brunei; and over the Paracel Islands, occupied by China, but claimed by Vietnam and by the ROC. The ROC government also claims the Senkaku Islands.

On October 14, 2024, China launched extensive military exercises near Taiwan in response to President Lai Ching-te's recent speech. Taiwan strongly criticized the move, and the U.S. raised concerns over rising tensions, with the drills marking part of China's broader pressure strategy.