Tuberculosis (TB) disease can be caused by either recent transmission from infectious patients or reactivation of remote latent infection. Spatial dependency (correlation between nearby geographic areas) in tuberculosis incidence is a signature for chains of recent transmission with geographic diffusion. To understand the contribution of recent transmission in the TB endemic in Taiwan, where reactivation has been assumed to be the predominant mode of pathogenesis, we used spatial regression analysis to examine whether there was spatial dependency between the TB incidence in each township and in its neighbors. A total of 90,661 TB cases from 349 townships in 2003-2008 were included in this analysis. After adjusting for the effects of confounding socioeconomic variables, including the percentages of aboriginals and average household income, the results show that the spatial lag parameter remains positively significant (0.43, p<0.001), which indicates that the TB incidences of neighboring townships had an effect on the TB incidence in each township. Townships with substantial spatial spillover effects were mainly located in the northern, western and eastern parts of Taiwan. Spatial dependency implies that recent transmission plays a significant role in the pathogenesis of TB in Taiwan. Therefore, in addition to the current focus on improving the cure rate under directly observed therapy programs, more resource need to be allocated to active case finding in order to break the chain of transmission.