After the second world war, Taiwan was transferred from the Japanese colonial administration to the Chinese Nationalist government under Chiang Kai-shek. While many Taiwanese welcomed the move, Chiang's heavy handed governance soon generated unrest.

The fire was sparked on 28th February, 1947 when a Taiwanese woman was arrested for selling cigarettes without a license. Chiang dispatched troops from China to quell demonstrations and in subsequent fighting 18,000 to 28,000 people were killed. Many doctors, lawyers, journalists, professors and other members of the Taiwanese intelligentsia were murdered, while Taiwanese mobs attacked many newly arrived refugees from China. The White Terror followed during the 1950s when anyone suspected of links to communism was arrested and imprisoned. The incident still provokes heated partisan debate.