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After years of deliberations and meetings over the terms of three mayors, the Department of Cultural Affairs, Taipei City Government was established on November 6, 1999 as the Cultural Affairs Bureau of Taipei. As the first local-level cultural organization in Taiwan, it holds a significant place in Taiwan history.

On September 6, two months before official launching of the department, Dr. Ying-tai Lung returned from Germany to serve as its director. As the department's first director, the internationally-renowned writer and cultural critic worked to make culture an affair of the people, for the benefit of the citizenry and not as a mandate to follow. During her tenure Ying-tai Lung espoused three main principles for the development of the Department: "Culture must take root in life," "modernity must be refined by tradition" and "globalization must be defined by localization."

The department has been structured to include four divisions, namely: First Division – International Affairs and Policy Making; Second Division – Cultural Preservation and Heritage; Third Division – Arts and Humanities; and Fourth Division – Public and Community Art Development. It also has four sections, namely, Personnel, Accounting, Secretariat and Government Ethics. The Department of Cultural Affairs, Taipei City Government subsequently established the Research and Development Section for the purpose of drawing up a systematic set of policies on culture and the arts.

In addition to the internal divisions and sections, the department oversees six subordinate organizations: the Taipei Symphony Orchestra, the Taipei Chinese Orchestra, the Taipei Fine Arts Museum, the Taipei Cultural Center, the Taipei City Archives and Zhongshan Hall.

Since its inception, the Department of Cultural Affairs, Taipei City Government has brought significant issues regarding cultural policy to the public's attention, and has been instrumental in presenting numerous public events to enhance the city's cultural life.