Shuhe Ancient Town, also named Longquan Village (which literally means dragon spring village), is located in the north of Lijiang old town . In Naxi language, Shuhe means “a village at the foot of a peak”. As the earliest habitation for Naxi ancestors, Shuhe Ancient Town is regarded as a living specimen of the Naxi ancestors’ transition from an agriculture civilization to a commercial culture. Similar to Lijiang Ancient City, Shuhe Ancient Town is surrounded by a murmuring river and interlaced with smooth flagging. It is a compact village hidden in the forest, and it lies near mountains and rivers. It is a more peaceful, smaller version of Lijiang Ancient City.

Qinglong Bridge has a history of more than 400 years; it is the landmark building in Shuhe Ancient Town. The entire bridge was built with stones, and is 25 meters (82 ft) long, 4.5 meters (15 ft) wide and 4 meters (13 ft) high. In early spring, the old bridge is decorated by verdant willows, which form a famous scenic spot in Shuhe.

Sifang Street, a market in the center of Shuhe village, covers an area of about 250 square meters (2,691 sq. ft). It is very lively during market days. Visitors can buy many leather products at the market. Surrounding the market are shops, all of which have archaic wooden facades. Travelers can buy various handicrafts here, such as unique ornaments and costumes reflecting ethnic styles.

Along the street about 100 meters (328 ft.) away is the fountainhead of a river surrounding the ancient town, a deep pool named Long Pool (Dragon Pool). From Long Pool, the overflowing water winds through the village and the bubbling sounds can be heard miles away. The locals regard this as a sacred spring, and built Beiquan Temple (North Spring Temple) here as a place to pray. Master leatherworking is enshrined in Sansheng Palace, which is the most unique part of the temple.