Boarding a warship in Yilan County, northern Taiwan, Tsai inspected the Han Kuang exercises featuring naval vessels and air force fighters, marking the first time for her to do so since taking office in May 2016.
Thanking the military for its "ability and determination to defend the country," she said, "Together, let's continue to work hard to protect our homeland."
The exercises, the island's largest involving all military branches, are intended to test Taiwan's ability to fend off a Chinese invasion by simulating attacks from sea, air and land.
In addition to the live-fire tests and field training, the exercises comprise computer-simulated war games, which were held between May 16 and 20. They were aimed at testing government agencies' ability to communicate and cooperate at times of threats at home and from abroad, particularly China.
This year's exercises are held at a time when Taiwan faces near-daily air and sea incursions by Chinese vessels and aircraft.
In Beijing, Chinese Foreign Ministry spokesman Zhao Lijian warned at a press conference Tuesday "the attempt to confront the mainland militarily is bound to fail."
He also said "Taiwan independence is nowhere."
China and Taiwan have been governed separately since they split in 1949 due to a civil war. Beijing has regarded the island as a renegade province to be reunified with the mainland, by force if necessary.