The Taiwan government has boosted security at the airport and the hotel in Taipei where the Chinese delegation will be staying.
Less than two weeks ago, demonstrators in the southern Taiwan city of Tainan jostled and knocked a visiting Chinese official to the ground, outraging Beijing.
Taiwan split from the mainland in 1949 after nationalist forces retreated to the island following the victory of Mao Zedong's communists.
Both Beijing and Taipei officially claim to represent the legitimate government of all China.
Although it shifted diplomatic ties to Beijing in the 1970s, the US remains Taiwan's closest ally and arms supplier.
Mainland China regards Taiwan as a renegade province and has said any moves by the island to declare independence will be opposed by force if necessary.
Taiwan says China has around 1,000 missiles aimed at the island and trained hundreds of thousands of military personnel for invasion.
Monday's visit is widely seen as a direct result of efforts by Ma Ying-jeou, the Taiwanese president, to improve ties with Beijing and end decades of political rivalry since he took office in May.
China still considers Taiwan a renegade province and has threatened to use force to quell any move towards formal independence.
But Ma has repeatedly tried to assure the public that Taiwan's sovereignty will not be compromised, saying he understands the protesters' concerns and will relay "the voice of the Taiwanese public" during his talks with Chen.
"It is not such a bad thing to let Chen Yunlin understand Taiwanese views ... but [any protests] must be legal and peaceful," Ma was quoted as saying by Sunday's China Times, a leading Taiwan newspaper.
Referring to the 1,300 missiles pointed at Taiwan, Ma said China should ease its military threat against Taiwan.
China has claimed sovereignty over Taiwan since 1949, when Mao Zedong's Communists won the Chinese civil war and Chiang Kai-shek's Kuomintang nationalist army fled to Taiwan.
"The hard ice between the two sides has already been shattered, the road has already been opened," Wang Yi, the head of Beijing's Taiwan Affairs Office, said before Chen's departure.
"This will go down as a great event in the history of relations across the [Taiwan] Straits."
Wang said China is willing to listen to all Taiwanese who genuinely want to improve ties.
"Certainly, there are different voices, as Taiwan is a multi-faceted society," he said.
"As long as they mean well for the development and understanding of relations over the Taiwan Strait, we will seriously consider and respect them."
Protest organisers however said they would hold their biggest rally on Thursday when Ma is scheduled to meet Chen at a Taipei guest house.
Taiwan's main opposition Democratic Progressive Party, which favours formal independence from China, said it plans to greet Chen with protests and sit-ins, accusing China of using business deals to buy popular support for the island's political unification with Beijing.
"If Ma's government keeps talking like this to China, it definitely has political implications," said Cheng Wen-tsang, a party spokesman.
Taiwan Society North, a pro-independence group, offered cash rewards for any protesters who manage to hit Chen with eggs during his stay.
"We will offer 1,000 New Taiwan dollars ($30) to protesters who hit Chen's body with eggs, and NT$10,000 ($300) to those who hit Chen's face with eggs," Michelle Wang, the group vice chairwoman, said.