Applying the surface-wave Gaussian beam method to a three-dimensional (3-D) structure of Taiwan, we have studied the generation and propagation of short-period (10-s) surface waves in a region of pronounced crustal heterogeneity, especially in a region defined to be at an epicentral distance larger than a few focal depths away, where high-frequency near-field motions are largely attenuated and surface waves are adequately developed. By perturbing the source model as well as the crustal model in an iterative inversion process, we have achieved an excellent fit to the recent strong-motion observations recorded during the Tung-Ao earthquake (June 5, 1994, M-L = 6.0) in Taiwan. This-allows us to (1) obtain a refined 3-D crustal model of Taiwan from an initial model that was derived from recent tomographic results and, more important, (2) explain the distribution patterns of the strong shaking reported in terms of intensity maps for historical large earthquakes, and predict the long-period strong-motion distribution patterns for future large earthquakes in Taiwan. With an improved 3-D structure, we have gained better insight into short-period surface-wave propagations as they are modified by crustal lateral heterogeneity. Focusing and defocusing are clearly demonstrated. Of particular interest is the Central Mountain Range, a massive Tertiary metamorphic body forming the backbone of Taiwan, that seems to serve as a "divergent lens" for the propagating surface waves, whereas the large sedimentary basin in southwestern Taiwan seems to focus the wavefronts instead. The computed distortions of the propagating surface-wave field due to lateral heterogeneity are correctly reflected by the observations.