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Sun Moon Lake is situated to the north of Yu Shan (Jade Mountain) and to the south of Nenggao Mountain, Nantou County in Taiwan Province. It is the biggest natural lake in Taiwan and is formed by the accumulated water in the broken basin between Yu Mountain and Ali Mountain streams. The surface of the lake is 760 meters above sea level, its perimeter is 35 kilometers, the depth of the water is 30 meters on average and the lake area is over 900 hectares. There is a small island inside Jihueh Pool which looks like a pearl on the surface of the water, hence the name "Pearl Islet". After the victory of Japanese war, it was renamed "Gueng Hua (brilliance) Islet" in celebration of recovering Taiwan. To the north-east of the islet, the water is in a shape as round as the sun, so it is called Sun Lake while the water in the south-west looks like the moon, so it is called Moon Lake. Hence the combined name Sun Moon Lake.

The beauty of Sun Moon Lake is rested upon the mountains circling the lake. Peaks rise one upon another and range upon range of hills, green and luxuriant, the broad water surface, mirror-like calm water, azure lake water, islet in the lake, hill in the water, the light of waves and shadow of mists and different morning and evening scenery all year round, poetic and picturesque.