Taiwan's bid to join the United Nations for the first time under the name Taiwan, rather than the official title Republic of China, has been rejected.
President Chen (centre) submitted the application to the UN last week
A UN spokesman said the application had been rejected in line with a 1971 resolution, under which the UN switched recognition from Taiwan to China.
Taiwan, which has tried to join the UN more than 14 times, said it deeply regretted the world body's decision.
China views Taiwan as a breakaway province of the mainland.
Though both have been governed separately since the civil war in 1949, China has vowed to use force if it ever moves towards independence.
The Chinese foreign ministry last week said Taiwan's UN bid was "doomed to failure".
Taiwanese President Chen Shui-bian submitted a letter of application to the UN Secretary General last week, arguing that Taiwan, as the world's 18th largest economy and seventh largest investor, should not be excluded from the body.
Rejecting the application on Tuesday, the UN cited its adherence to the One China policy agreed under the 1971 resolution, which acknowledges Taiwan is a part of China.
Until 1971, the government in Taipei held the UN seat for China rather than Beijing.
Taiwanese Foreign Ministry spokesman David Wang said the government regretted the UN move, saying it had been blocked "for political reasons".
"The 1971 resolution should be reviewed, as it fails to address the question of the right of representation and participation by the Taiwanese people," he said.
The decision to apply to the UN under the title Taiwan for the first time rather than the Republic of China reflects efforts by the independence-leaning President Chen to stress the island's distinctiveness from mainland China, the BBC's Caroline Gluck in Taipei says.
Despite the setback, the government still plans to push ahead with a referendum on joining the UN alongside presidential and legislation elections next year, despite concerns from Washington and Beijing, our correspondent adds.