Close to north-south axis of the city, Shichahai is located in the northern part of Beijing's inner city. As the only open water scenery in the ancient capital, it is composed of Qianhai (Front Lake), Houhai (Back Lake) and Xihai (West Lake). Being the biggest of the 25 Cultural and Historical Areas under government protection, Shichahai's position is uniquely related to the history in terms of municipal planning and construction.

From Yuan Dynasty (Kublai Khan's era) downward, it had been a commercial serving-point for Beijing-Hangzhou Grand Canal navigation. Pubs, teahouses, eateries and handicrafts' workshops flourished flanking the lake.

During Ming and Qing Dynasties (1368-1911, the last two dynasties in China), due to its serenity and natural beauty in the hustle and bustle capital, rich mandarins, wealthy merchants, scholars and celebrities started having their residences and private gardens built in this area. Some monks even had their monasteries constructed here. All these are presently reflecting the rich culture and historical heritage of Beijing. Amongst these architectures and gardens, the most well known are the Prince Gong's Residence & Garden, (the former residence of Qing-Dynasty courtier He Shen in Emperor Qianlong's reign), and a small stone bridge called Yin Ding Qiao (Silver Ingot Bridge) dividing Houhai and Xihai. This bridge is "the best spot downtown to view the western hills of Beijing".

After the founding of P.R. China in 1949, some personage and government officials also settled down along the lake, leaving some much-told stories and a few anecdotes to the area.

Shichahai's natural beauty is famed for its resemblance to West Lake's Spring (in Hangzhou), River Qinhuai's Summer (in Nanjing) and Dongting Lake's Autumn (in Hunan).