After the First Sino-Japanese War in 1894, the Qing government handed Taiwan over to the Japanese in accordance with the Treaty of Shimonoseki (Treaty of Maguan). This changed the fate of Taiwan as well as the history of Yilan. The first few years of colonization were marked by resistance to Japanese rule, causing major upheavals in the everyday lives of the people. The rebellion heightened vigilance within the Japanese military forces, which quelled any insurgency by closely searching all the villages and executing anyone who took up armed resistance, those who possessed weapons, and even individuals that exhibited erratic behavior. Such events caused extreme unease in the majority of the people of Yilan.
During the first decade of Japanese rule in Yilan, the colonial government continued to tighten its control over local organizations. Police stations were set up in various locations, and old security systems were upgraded to become aides to the police force. From the central to the local governments, control was gradually established and strengthened.
In Taiwan, the rule of personal influence began to fade as the rule of law began to take hold. Laws enacted in Tokyo or Taipei directly influenced people's everyday lives. Compartmentalizing and administrative regulations, personal hygiene, the calendar, measurements, cutting off men's queues, the custom of foot-binding—everything became subject to the law. The people of Yilan were thus nudged and coaxed into the modern world from that of tradition.
During the second decade of colonization, the objective of rule became directed at the oppression of the Atayal tribe. The district of Yilan began a project of expanding its lines of defense in 1903, which extended from the low mountain ridges in the Xinan district of Yilan to the coastline along Nanfang'ao and the Su-Hua Precipice in greater Nan'ao, thus boxing in the Atayal aborigines.
After a five-year project of "governing the aborigines" in 1910, the various Atayal tribes within modern day Yilan County were all incorporated into colonialist rule. After gaining control of aboriginal land, the Japanese began cutting down trees for the manufacturing of camphor and put forward plans for surveying and developing uncultivated land in Balisha and the greater Nan'ao region. The Han were thus endowed with new frontiers in which to expand and grow, and it was during this period of historical opportunity that Hakka migrants from western Taiwan came to Yilan.