Since President Ma's inauguration in 2008, the number of people who recognize themselves to be Taiwanese has been on the increase, and it has become higher than it ever was during Chen Shui-bian’s administration. Some scholars have commented that “with the improvement in the cross–Strait relationship, the Taiwanese identity is in fact growing stronger.” The purpose of this article is to provide an in-depth investigation into the following questions: What is the basis of the Taiwanese people’s self-identification? What is the actual impact on the self-identification of the Taiwanese public following the process of extensive exchange in the Taiwan Strait? The research hypothesis and variables in this paper are designed under the theoretical frameworks of “the nationalist self-identity” and, in addition, “intergroup relation theory” which examines group identification. Through employing the “structural equation model” (SEM) and analyzing data obtained from telephone interviews, it was discovered that two competing national identities are important factors in shaping the Taiwanese people’s self-identity. Subjects lacking previous contact or experience with Mainland China tend to feel stronger differentiation between the two identities. However, if subjects are more familiar with Mainland China, their national identity, which emphasizes the difference between Taiwanese and Chinese, will be modified. The modification will not, however, change their original national identity. This study not only strengthens the conventional approach of emotional/symbolic identity analysis, but also observes the impacts of the very comprehensive cross-Strait relationship.