Using time-series figures of sea-level anomaly and geostrophic currents from merged absolute dynamic topography, we analyzed the formation and evolution of the Kuroshio current loop (KCL). The main results are as follows. Perturbation origins of the KCLs are in three areas (eastern, western, and southern) surrounding the Hengchun Submarine Ridge. There are two basic types of KCL formation, i.e., “Kuroshio bend pushing” and “Kuroshio Branch rewinding”, plus their combination. The KCLs propagate westward at 1.6–4.5 cm/s. There are two forms of KCL evolution into a shed eddy. The first is such that the northern KCL section initially divides to become an eddy joining the Kuroshio Branch current, which then separates from that current to become a shed eddy. The second form is such that the northern and southern sections of the KCL are separated almost simultaneously in westward elongated process. To understand the KCL formation mechanism, we derive linear equations in phase space from the governing equations in σ-coordinates, ultimately obtaining two groups of analytical solutions for interactions between waves, topography, and the basic current field. The solutions lead to the following results. The KCL propagates westward with the group velocity of the Kuroshio center region. The Kuroshio generally sweeps over the Hengchun Submarine Ridge, especially in winter, such that there is topographic–baroclinic instability. The analytical solutions effectively reveal the dynamic mechanism of the two basic types of KCL formation.