Yuyuantan Park is located on the southern end of Sanlihe Road, with its main gate directly opposite the Southern Road of the Altar of the Moon (Yuetan Nanjie). In the past it was known as Angler's Terrace (Diaoyutai) because in the Jin Dynasty, an official named Wang Yu secluded himself here in the guise of a fisherman.

Nowadays, a tall brick terrace runs from north to south along the southwestern portion of the wall surrounding the Diaoyutai State Guesthouse. The main western gate leading to the terrace still bears a stone plaque inscribed with "Diaoyutai" in Emperor Qianlong's hand. Three entrance ways stand to the east of the terrace, the central one is directly opposite to the terrace's western gate. All four sides of the terrace are lined with crenellations, which give it the appearance of a miniature castle.

This, however, is not the real Angler's Terrace, but merely a terrace built in honor of the emperor's inscription. The actual terrace stands to the north of the Room for Convalescence (Yangyuanzhai). There were a spacious hall and a pool where the emperors went fishing. In 1773, Emperor Qianlong had an imperial resort constructed here. The lake was then dredged and enlarged with spring water diverted from the Fragrant Hills (Xiangshan).

The history of the terrace goes back much further than the time of Qianlong. According to local histories, the "Diaoyutai, to the west of Sanlihe, dates from the Jin Dynasty Below the terrace is a small pool fed by a spring which never runs dry, even in the winter All the streams flowing from the Western Hills converge here." The great beauty of this natural scenic area was described in a poem written over 800 years ago:

Grass grows lushly on Yuyuan Lake,
The gurgling spring flows into distant streams.
Weeping willows line the dykes before the darkening hills.
Peach blossoms float on the water at sunset.

Angler's Terrace served as a pleasure spot for emperors as far back as the Jin Dynasty. One Jin emperor wrote: "His Majesty's carriage has made several trips here; the splendor of the Angler's Terrace compares with that of the Terrace of Gold."

The history of the park reflects the rise and fall of successive dynasties. Under the Yuan it was renamed Yuyuantai and belonged to a family named Ding. In the Ming Dynasty, from the time of Emperor Wanli (reigned 1573-1619) it was the personal villa of a nobleman named Li. Due to neglect, by the end of the Ming Dynasty there was neither a terrace nor a pavilion to speak of, though the name of the park was passed down through the centuries by the local people. In the early 20th century, Puyi, the last Qing emperor, made a gift of the park to his teacher Chen Baochen, but Chen only came here to celebrate his birthdays.

At the time of the founding of the People's Republic, the entire area was reduced to desolation. Apart from the Room for Convalescence used by General Fu Zuoyi as a summer villa, there were a few dwellings in the area. In 1956, the People's Government expanded the surface of the water and diverted water from the Yongding River to fill the newly dredged 100,000-square-meter gourd-shaped lakebed which lies to the south. The shores of the lake were planted with poplar and willow trees. Today the lake in the park serves both as a reservoir and a place of great scenic beauty.

In October 1958, the Diaoyutai State Guesthouse was built around the ruins of he ancient terrace. A stream winds its way through three artificial lakes on the grounds. The lakes are well stocked with fish; hotel guests can enjoy fishing at their leisure. Graceful weeping willows line the shores of the lakes, and white poplars are planted along the sides of the roads. Bridges, artificial hills, rockeries, rare flowers and exotic plants provide a rich setting for the pine-shaded villas. In addition, there are various fruit trees-peaches, apricots, apples, pears and haws. In spring lilac and flowering crabapple fill the air with their fragrance, and peonies compete for the attention of the passing bees.