When the Dutch occupied Taiwan in the 17th century, they made Lugang an important harbor for the export of Taiwan’s commodities. In 1784 A.D. the Qing government designated Lugang as the only harbor allowed to handle goods shipped to and from Quanzhou in Mainland China, making Lugang the gateway to central Taiwan. On one street, the shops were packed closely together and the street covered over to form the “see-no-sky street.” In the early 20th century local residents blocked a proposal for a rail line to the town, the harbor silted in, and Lugang's position declined. That loss can actually be considered a gain, however, because it enabled Lugang to preserve many of its original cultural and architectural features.

The most charming areas of Lugang are the historic alleys with their old houses, the deep, narrow patio-type buildings such as Yuanchang store on Zhongshan Rd., the old streets, and the Lugang Folk Art Museum. The half-old-half-new buildings on Zhongshan Rd. are a result of street expansion during the Japanese occupation, when the front halls of buildings were torn down to accommodate the street-widening project Longshan Temple is a complete representation of the art and architecture of the early days.