In this study, long-term wind fields during 1991–2010 from the Climate Forecast System Reanalysis (CFSR) were dynamically downscaled over Taiwan and its offshore islands at a 5 km horizontal resolution using the Weather Research and Forecasting (WRF) model. Simulations of the 10 m (above sea level) dynamically downscaled winds served as the atmospheric forcing for driving a fully coupled wave-circulation model. The sea states of the waters surrounding Taiwan during 1991–2010 were hindcasted to evaluate the offshore wave energy resources and optimal wave energy hotspots. This study reveals that the southeastern offshore waters of Taiwan and the Central Taiwan Strait exhibited the highest mean wave power density (WPD), exceeding 20 kW/m. The annual mean WPD, incidence of the hourly WPD greater than or equal to 4 kW/m, monthly variability index and coefficient of variation of the WPD indicated that the sea areas located between Green Island and Orchid Island (OH_1), southeast of Orchid Island (OH_2), south of the Hengchun Peninsula (OH_3), and north of the Penghu Islands (OH_4) were the optimal hotspots for deploying wave energy converters. The most energetic months were October for OH_1 and OH_2 and November for OH_3 and OH_4, while the wave power was weak from March to June for OH_1, OH_2 and OH_3 and in May for OH_4. The wave direction is prevailingly east-northeast for OH_1, OH_2 and OH_3 and nearly northeast for OH_4. These phenomena reveal that wave power in the waters offshore Taiwan is induced primarily by the northeast (winter) monsoon. The exploitable annual WPD was estimated to be 158.06, 182.89, 196.39 and 101.33 MWh/m for OH_1, OH_2, OH_3 and OH_4, respectively.