Passengers will pay NT$1,460 for a standard class seat from Panchiao to Kaohsiung while business class tickets will cost NT$2,390.
On Monday, Chen Shui-bian, Taiwan's president, took a test ride and said that the "revolutionary vehicle will virtually transform Taiwan into a city-state like Singapore".
Taiwanese gushed with excitement as they boarded the bullet train which is expected to not just reduce travel time but also bridge regional differences for the country's 23 million people.
Su Cheng-er, 68, who was on board with eight family members, said: "I could not sleep last night. I got up very early in the morning as I feared I might miss this historic moment. This is about national pride."
Much anticipated launch
But that national pride has taken a beating along the way.
The project has been 10 years in the making with metaphorical and literal derailments along the way.
Two Japanese consortiums, led by Mitsubishi Heavy Industries, were awarded contracts for the tracks, which they built using Japanese bullet train, or Shinkansen, technology.
Fundraising issues and cost overruns dogged the construction.
And technical problems, including several minor derailments attributed to human error during trial runs late last year, hurt the project's public image.
The Taiwan High Speed Rail Corporation will manage the service for 35 years before turning it over to state control.