The city has a history of at least 800 years and may date as far back as the Song Dynasty. It guards the division of the Jade River into three streams, among which canals and waterways were cut to flow along the old town streets. A book by an American commissioner brought the town some fame in the 19th century and foreign tourists began to return soon after China liberalized its visa policy in the 1980s.
Local people began restaurants and cafes and then came to domestic and international attention following a 1996 earthquake. Amid the destruction, China's people were drawn to the lifestyle and excellent environment around Lijiang and began pouring in. Domestic movies and TV shows have made it as popular as Yunnan's reigning vacation destination Dali, although Xishuangbanna is rising as well as the other two become more commercial and expensive.