In April 2004, all national universities, which had previously been legally subordinate to MEXT (Ministry of Education, Sports and Culture), were given a legal personality and became "National University Corporations". With this change, each national university now enjoys greater autonomy vis-a-vis the government in terms of how it uses its budget (block grants), personnel issues (recruitment, appointments, salaries, etc.), internal organisation, etc., although universities are still subject to government regulations in some areas, such as the size of enrolments and tuition fees. Now that national universities are no longer bound by the strict regulations imposed by the government, each of them should be able to develop its own individuality and specialise in certain fields. This document will mainly focus on examining the initial reactions of the newly created National University Corporations. On the basis of recent information on national universities (National University Corporations), we shall show how they have clarified their strategic objectives and plans, and also how they have changed their organisational structures and staffing so as to achieve these objectives and plans. Some universities encountered serious problems in preparing their incorporation, particularly with regard to decision making processes, the apportionment of powers between the president and departments, and staffing. We shall then analyse the problems stemming from the incorporation of universities, and conclude by presenting some of the major problems faced and the directions that may be taken by universities and the government in our knowledge-based society.