The city is near the Kaesong Industrial Region close to the border with South Korea and contains the remains of the Manwoldae palace.

Called Songdo while it was the ancient capital of Goryeo, the city prospered as a trade centre that produced Korean ginseng.

According to the Samguk Sagi, when a castle was built in the site in 694, the third year of Hyoso of Silla's reign, Kaesong was referred to as "Song'ak (송악; 松嶽)".

In 1010, the first year of Hyeonjong of Goryeo's reign, the palace and houses were almost burnt down during the second conflict in the Goryeo–Khitan War, so in 1018, Gaesong-bu was relegated for the "bu" system, and became to govern the three hyeon unites of Jeongju, Deoksu, and Gangeum.

UN Forces abandoned the city on 16 December 1950 during the withdrawal to the Imjin River following the Chinese People's Volunteer Army intervention in the war.

[4] Ceasefire negotiations began in Kaesong[7] on 10 July 1951, but were moved to Panmunjom, southeast of the city, on 25 October 1951.

In 1957, Kaesong became a "Directly Governed City" (Kaesŏng Chikhalsi; 개성 직할시; 開城 直轄市).

It covers an area of 1,309 km2, the urban district is surrounded by Songak (Songak-san; 송악산; 松嶽山) (489 m) and Pongmyong mountains.

With the exception of the mountainous northeastern region, however, most areas of Kaesong consist of low hills with heights less than 100 meters A.S.L.

The river basin located in the southwest of Kaesong has spacious alluvial plains such as P'ungdŏkbŏl, Singwangbŏl, and Samsŏngbŏl.

[9] The geology consists of the Proterozoic, Cenozoic, and Paleozoic strata and Mesozoic intrusive granite.

The underground resources include gold, zinc, copper, fluorspar, limestone, granite, and kaolin.

In 2003, P'anmun-gun and part of Kaesong-si were separated from Kaesŏng Directly Governed City and merged to form Kaesong Industrial Region.

In addition, vegetable and fruit cultivation including peach, apple and persimmon, livestock farming, and sericulture are active.

The counties of Kaepung-gun and Panmun-gun are also known for cultivating the quality Korean ginseng called Goryeo Insam.

[citation needed] Since the Goryeo period, Kaesong had been a center of handcrafts such as Goryeo ware and commerce while the textile industry has been the primary business along with the production of grocery goods, daily general goods, and ginseng products after the division into the two states.

In addition, resin, timber, handicrafts, pottery, shoes, school supplies, musical instruments, and glass are produced.

As of 2002, the city contained the headquarters of the Central Bank of North Korea, with branches also in Kapung and Panmun counties.

The famous Pakyon Falls are located in the area, as well as a large, recently discovered Goryeo-era Buddha carved into the stone on Mt.

Sungkyunkwan, one kilometer north of Seonjukgyo bridge is a representative traditional educational institution in Kaesong.

It was founded in the neighborhood of Gukja-dong with the name Gukjagam (국자감; 國子監) in 992 during the reign of King Seongjong of Goryeo, which ignited Korean Confucianism.

Its name was changed to Gukhak (국학; 國學) in the reign of Chungnyeol of Goryeo and was referred to as Seonggyungwan.

In 1367, the 16th year of Gongmin of Goryeo's reign, the structure was revamped and Yi Saek, and Chŏng Mong-ju, Confucian scholars of the time taught there as professors.

However, when the Korean War occurred, the foundation was moved to Incheon, and reconstructed Songdo Middle and High Schools in 1953 which still exist to the present.

There were also eight public elementary schools (국민학교) in Kaeseong by 1950, they were the Manwol (만월; 滿月), Donghyun (동현; 銅峴), Seonjuk (선죽; 善竹), Koryo (고려; 高麗), Songdo (송도; 松都), Junggyeong (중경; 中京), Namsan (남산; 南山) and Deokam (덕암; 德岩) elementary schools.