Both the Western model and the urbanization thesis have been used to explain urban growth for the urbanizing countries of Asia. This paper examines levels and rates of urbanization in Taiwan and its ability to absorb a growing labor supply in its urban centers. Urban growth is concentrated in the Northern region and in large urban places. By 1975, half of Taiwan’s population was located in places of 50,000or more and 80 percent of the total population growth between 1964 and 1975 occurred in urban areas. Despite substantial urban growth and an even more rapid labor force growth, workers were absorbed into “urban” industries and occupations. Based on this. ability to absorb, Taiwan does not appear to be overurbanized and seems to fit the Western model.