However, after the PRC implemented economic reform and altered the approach to Taiwan starting from 1980s, the ROC Government allowed nationals to visit their mainland relatives in 1987, and the necessity of regulating the cross-strait relationship arose thereafter.

In 1991, the Temporary Provisions were repealed by President Lee Teng-hui, which allowed the act to be passed by the Legislative Yuan on 16 July 1992 and commenced at the end of the month.

[4] The act is prominent in governing the relationship between Taiwan and mainland China, which various subsidiary legislations were made under this law, and was amended during the ruling of both Kuomintang and Democratic Progressive Party (DPP).

[5] An amendment was passed in 2019 which any cross-Strait political settlement must be considered by the parliament twice and approved in referendum before being signed by the president.

According to the act, "people of the Taiwan area" refers to those under the jurisdiction of the government of the Republic of China on Taiwan and its associated islands; "people of the Mainland area" refers to those under the jurisdiction of the government of the People's Republic of China, with the exception of Hong Kong (a former British colony that was ceded by the Qing in 1842) and Macau (formerly a Portuguese colony ceded by the Qing in 1887) which are governed by the separate Laws and Regulations Regarding Hong Kong & Macao Affairs, unless changes in Hong Kong and Macau endanger Taiwan's security as stipulated by Article 60 of the Laws and Regulations:[9][...] should any change occur in the situation of Hong Kong or Macau such that the implementation of this Act endangers the security of the Taiwan Area, the Executive Yuan may request the President to order suspension of the application of all or part of the provisions of this Act [...] Should the application of any part of this Act be suspended and no other laws or regulations be formulated to govern relations between the Taiwan Area and Hong Kong or Macau, the relevant provisions of the Act Governing the Relations Between People of the Taiwan Area and the Mainland Area shall apply.Chiu Chui-cheng, spokesman of the Mainland Affairs Council, revealed to Nikkei Asia in 2019 that the ROC government planned to block iQIYI and Tencent Video (or WeTV) in Taiwan to curb false information against Taiwan made by the PRC government.