This paper examines the practice of Chinese medicine in Taiwan. Using a national sample survey of Chinese medicine physicians, supplemented by another national survey of Chinese medicine hospitals and government records, the authors study the education and training background of Chinese medicine physicians, their mode of practice, their productivity measured by patient visits, and the practice characteristics of Chinese medicine hospitals. Moreover, the authors investigate the relationship between the resource input, the public health insurance contract, and the number of patient visits Chinese medicine physicians provided. Results of this study are used to make several recommendations on the appropriate way of integrating the practice of Chinese medicine into the modern health care system. Many of these recommendations may also be applicable to other countries that are contemplating integrating traditional or alternative medicine into their health care systems.