Currently, the outlook toward the fifty-year period of Japanese rule in Taiwan in Taiwanese studies has been taken from the standpoint of the triumphant group, which represented the Satsuma and Chosun regimes. For this reason, acknowledgement to the ruling Japanese in Taiwanese studies is flat and monotonous, which tended to monopolize and purify modern Japanese nationalism. Moreover, the literary frameworks constructed by Japanese writers in colonial Taiwan tended to be seen as typical “national literature” subordinated to metropolitan Japan. However, a review of the leading Japanese writers in colonial Taiwan reveals that most were from the northeast of Japan; the defeated group in the Meiji Restoration, or related to them. Besides, we can see from the literary statements of the writers from the defeated group the internalization of the multiple layers and complexities of nationalism. The representative example is the legends of Prince Kitashirakawa, who was seen as the legitimate successor to Emperor Komei, which were broadened and reproduced during the colonial period. Not only the legend of Prince Kitashirakawa but also the “national literature” constructed by the writers of the defeated group differs from the standpoint of the triumphant group behind the Meiji Restoration, which has been taken as the mainstream. Through that contrast, they offered the prospect of renewal in the recently acquired territory of Taiwan. The purpose of this paper is to examine Japan’s early colonial history in Taiwan, the legends of and writings on Prince Kitashirakawa, and how the writers from the defeated group constructed the “national literature” in colonial Taiwan.