Public sector reform has been an important strategy for the Macao government to build up its legitimacy since the handover of sovereignty. This article outlines the background of the legitimacy crisis that can be traced back to the administrative problems during the colonial era. Public sector reform in the post-handover era can be divided into two phases. Remarkable legitimacy-building was evident during the first phase of the reform that focused on the technicality of administrative efficiency and work performance. With a looming crisis of legitimacy in 2006, the Macao government continued to rely on the reform of the technical aspects of the administration by taking the approach of wider public consultation in the second phase of the reform. What have been left unreformed are the institutional shortcomings that hold back public participation and weaken the autonomy of public administration. The cause of the legitimacy crisis starting in the mid-2000s was the failure to introduce wider public involvement in public affairs and the maintaining of limited administrative autonomy. The path dependence of the second phase of the reform can hardly tackle the key factors of the new legitimacy crisis.