The incumbent, James Soong, was re-elected with 56.3 per cent of the vote, and immediately reaffirmed the Nationalist policy of reunification with China.
Chen Ding Nan, the candidate of the Democratic Progressive Party (DPP), which opposes reunification, polled 38.8 percent.
The authorities had warned people to stay at home as 70,000 police geared up to prevent violence before the party's biggest electoral test since 1945.But voting across the island passed off peacefully.
Opposition demonstrators paraded an effigy of President Lee Teng Hui as a corrupt emperor. One gubernatorial candidate, Ju Gau-jeng, scuffled with police.
The governorship was the most senior post to go to the vote since the lifting of martial law in 1987 heralded democratic reform.
The big issue has been whether Taiwan should seek independence from China - its rival since 1949 - or reunification. The ruling Nationalists, who fled to Taiwan in 1949 after losing the civil war on the mainland, favour eventual reunification, as do the opposition New Party.
The DPP advocates independence - a controversial position, because Peking has said that it might use military force if Taiwan does this. ReuterReuse content