This paper examines the effect of banks'off-balance sheet activities on their risk and profitability in Taiwan. We takes quarterly data of 37 commercial banks, covering the period of December 2010 to March 2015 as research sample.Our empirical studies show that the use of interest rate and exchange rate-related financial derivativesincreasesthebanks' total risk and profitability. Loan commitmentexposes banks to lower credit risk and bankruptcyriskwhile guaranteed businesshave no significant impact on bank risk and profitability. The study also found that bankswith larger asset size have lower total risk, credit risk, bankruptcy risk and higherprofitability. The interest rate sensitivity gap of banks is positive related to total risk measured by profit fluctuation. The higher leverage ratio increases the bank's credit risk and bankruptcy risk. The higher leverage ratio also reduces the total risk and profitability measured by the return on the assets, but leads to an increase in the total risk and profitability measured by thereturn on equity.