On the west side of the Forbidden City is a wide expanse of water called Tai Ye Chi. Tai Ye Chi is divided into three parts: Beihai (north lake) in the middle, Nanhai (south lake) in the north, and Zhonghai (middle lake) in the south. Beihai, the best known, was turned into a royal garden as early as 1,000 years ago. Designs of Tai Ye Chi can be traced to an ancient legend, which says that there were three celestial mountains in the Beihai Park inhabited by immortals. Two early emperors sent people to look for the mountains to no avail. Realizing the futility of similar expeditions, rulers of later dynasties took to constructing celestial mountains on the water space just outside the royal palace, turning legend into reality. The result is a garden of great beauty resembling an imaginary paradise. Today, the area surrounding the middle and south lakes is where the Communist Party of China, and china's central government are headquartered. The Beihai Park has been developed into a public park.

The White Pagoda atop an island hill in the Beihai Park is a famous landmark in Beijing. The pagoda is 35.9 meters high and has a 30-meter-tall column inside. Inside a gold box atop the column are reputed to be two teeth belonging to Sakyamuni, the founder of Buddhism. Under the pagoda is a lamasery, which was formerly inhabited by scripture-chanting monks. The island hill, called Qionghua, serves as the center of Beihai Park. On its slopes are scattered structures of historical interest. A crescent building on its western slope contains 495 stone tablets bearing Chinese characters representative of almost all ancient calligraphic styles. The best time to view the Qionghua Island hill is when the sun is setting. It is then half tinged with a golden hue and half suffused with a sky blue.

One the southern shore of the Beihai Park is a walled city called Tuan Cheng, or round city, which was once an island in the park. With a circumference of only 276 meters, it is perhaps the smallest city in the world. The walls of the city protected the residence of Kublai Khan, the first emperor of the Yuan dynasty(1271-1368). Inside the miniature city are kept a 1.6-meter-tall jade Buddha, a huge jade bowl and an 800-year-old pine tree. On the north shore of the park stands one of the most famous monuments in Beijing, e.g. Jiu Long Bi, or Nine Dragon Screen. It is a wall covered with glazed tiles depicting nine dragons frolicking in the waves.