This paper intends to apply Graham Allison's three decision-making models to the crisis of the Taiwan Strait in 1955-96 and to analyze what went wrong in the process of decision0making in Taipei, Beijing and Washington. Indeed, all parties were at fault in regard to President Lee Teng-hui's visit to the United States in June 1995. When Beijing over-reacted to such a personal trip by launching a series of military drills, the Clinton administration's low-profile protests and warnings failed to stop Beijing's move. It was not until the Chinese People's Liberation Army test –fired missiles only twenty miles or so from the two port cities in Taiwan's north and south then Washington became alarmed in early March 1996. President Clinton's men reached a consensus immediately that they should take certain actions to prevent the crisis from being escalated to a cross-strait conflict. The crisis was over as a result of the U.S. dispatch of two carrier battle groups. However, mistakes made by Taipei, Beijing and Washington during this period have decrease mutual confidence among all three parties, thereby causing more and more new problems to arise. In sum, this paper argues that mistakes made by Taipei, Beijing and Washington triggered the crisis of the Taiwan Strait in 1995-96 and, even after the crisis was over, still have far-reaching impact on the subsequent development among the three parties. This paper further confirms that, nearly three decades after his first book entitled "Essence of Decision" was published, Allison's three models are still very useful and that the more data are gathered, the more powerful the interpretative and analytical capability of these three models would be.