In many countries female participation in the labor force has often been cited as one of the main factors depressing fertility. Previous research findings in Taiwan, however, do not indicate female employment's negative effect on fertility. This study attempts to clarify the causal relationship between female employment and fertility. The data were obtained from the employment and fertility survey conducted by Executive Yuan in 1979. Real family size, ideal family size and desired family size are used as the indicators of fertility. In the first section the fertility of working women is higher than the fertility of non-working women, but it does not reveal the same result when the degree of urbanization, education and age are controlled. In order to test the hypothesis of the inverse relationship between female labor force participation and fertility, the technique of ANOV and Path Analysis are used in the other sections of this study. Age, education and urbanization of resident are used as exogenous factors. The findings indicate that the working experience of resident does not have obvious effect on their real family size, but the nature and/or kind of occupation of working women has direct influence on fertility. Urbanization of resident does not show its direct influence on fertility and distributing its effect indirectly through the occupation of women. Both age and education do have direct and indirect influence on fertility. The conclusion of this research is that the occupation is an important intervening variable on fertility.