This paper aims to re-examine the effects offunding on university autonomy since therelationship between university autonomy andfunding is likely to be interpreted as a lineareffect; namely, the more funding the greaterautonomy. Such a simplistic vision is less than complete since it ignores the complicated nature of university autonomy. The nature of the latter should be defined contextually and politically. Itsinterpretation should also be placed in thechanging government-university relationships.This paper argues that the effect of funding on university autonomy is conditioned by the nature of university autonomy in a given country. While universityautonomy involves more than a financial tie,greater efforts on the part of universities todiversify their funding bases may well notenhance, at least directly, their autonomy.Through an extensive literature review, andempirical studies conducted in England and Taiwan, the argument of this paper is supported.