In early Taiwan, the conflicts between ethnic groups were frequent and occurred in times of limited scientific and medical knowledge. Faced with natural disasters and man-made calamities, our ancestors had to settle internal disputes and defend themselves from outside threats at the same time. Religious beliefs brought from ancestral homelands, therefore, became the major supporting force to lead their lives in peace and with spiritual solace. It is typical of Chinese societies that religion often becomes the strongest spiritual pillar, and religious architectures such as temples and shrines are often highly developed. It is hard to find a natural settlement or city in Taiwan whose historical development was not centered on temples or shrines. The present study seeks to find out how Taiwanese temples and shrines develop into new modes from the traditional types and the continuities and differences between the modern and traditional models. It also tries to understand how these developments affect the relation between local communities and temples or shrines. Secondly, the study examines the difficulties encountered in Shan Xi Shrine’s transformation from traditional practice of passive acceptance of believers into active engagement with the outside world through education, cultural heritage, ecological conservation, and public welfare activities. It is supported by field investigations that show how Shan Xi Shrine discovers a unique path leading to multi-faceted developments that distinguish it from other Daoist shrines. Lastly, the study probes into the modes of collaboration between Daoist shrines and communities and tries to propose potential activities which can be induced from the core beliefs of Daoist folk religion. It also uncovers the healing power such core beliefs are capable of exerting on religious and local communities, and how these beliefs function in the agendas of ecological and life education. The study’s findings show that the developments of activities planned by Daoist shrines and community care institutions reveal the strength of religious beliefs, which helps integrate and maintain the religious spirits that have gradually dwindled in society. The bond between religion and communities in effect demonstrates the life education and ultimate concern of Daoist religious spirit. Religious beliefs help local communities to realize social welfare and ecological conservation projects, and create an internally coherent and consolidated community culture as a result.