As a result of Japan's wartime occupation, language contact between the Japanese language and local languages in the Pacific Rim has occurred over the course of a number of years and, consequently, is responsible for various types of language change in this area. In Taiwan, for example, contact between Atayal and Japanese has produced a little known language variety spoken by indigenous residents living in Yilan County in Eastern Taiwan. We have named this variety 'Yilan Creole'. As a part of an interim report on our research, the present paper attempts to clarify the socio-historical background and the linguistic nature of 'Yilan Creole'. We hope these attempts will serve as a basis for establishing the validity of our claim that this new language variety is in fact a creole.