This paper applies a four-stage data envelopment analysis (DEA) approach proposed by Fried et al. (1999) to measure the operational environment-adjusted efficiency of sixty mutual funds in Taiwan from 2006 to 2010. We adopt the approach for adjusting negative output as suggested by Lovell and Pastor (1995). In addition, the truncated regression model is used to estimate effects of environmental variables on input slacks in the second stage. The efficiency of funds initially lightly declined, rapidly rose during the financial crisis of 2008, and then gradually fell again. Manager attributes as well as fund characteristics significantly affect the performance of mutual funds. This research finds that the Balance fund performs better than the others and female managers perform more outstandingly than male managers both in cost control and risk management. Accordingly, firm size measured by the net asset value of funds has a positive impact on performance, but persistence, manager tenure, manager replacement, and funds under management all negatively influence management performance.