This research empirically examines the institutionalization of the party negotiation mechanism in Taiwan's Legislative Yuan. Utilizing data of legislative initiatives from the 8th Legislative Yuan, in-depth interviews with legislators and a survey of legislators' staffs, we investigate how often the party negotiation mechanism is adopted to settle partisan conflicts, whether it is used in accordance with the laws and finally, whether it is widely recognized and valued as a key mechanism in the policy-making process. The findings show that the party negotiation mechanism has been recognized by parties and legislators as a major pathway to resolve disputes within the Legislative Yuan. In practice, the party negotiation mechanism is applied much more frequently than voting. A successful negotiation is almost a guarantee of successful legislation. Moreover, a considerable portion of political actors within the Legislative Yuan, including those from the majority party, the minority party and small parties, approve of the utility of negotiation, which helps the institutionalization of the party negotiation mechanism. Yet, the practice of this mechanism has not been stabilized, and its application has not completely followed the statutes. The Speaker of the Legislative Yuan also has the discretion to determine the operation and hence, the outcomes of party negotiation meetings. According to our findings, it might be too early to say that this mechanism has been institutionalized.