Built as an imperial Chinese military fort, the walled city became a de jure enclave after the New Territories were leased to the United Kingdom in 1898.

After an arduous eviction process and the transfer of de jure sovereignty of the enclave from China to Britain, demolition began in March 1993 and was completed in April 1994.

The history of the walled city can be traced back to the Song dynasty (960–1279), when a military outpost was set up to manage the salt trade in the area.

Aside from such institutions, however, the walled city became a mere curiosity for British colonials and tourists to visit; it was labelled as "Chinese Town" in a 1915 map.

In 1933, the Hong Kong authorities announced plans to demolish most of the decaying walled city's buildings, compensating the 436 squatters that lived there with new homes.

During the World War II occupation of Hong Kong, the Japanese occupying forces demolished the city's wall and used the stone to expand the nearby Kai Tak Airport.

In November 1946, Nationalist Chinese officials created the "Draft Outline Plan for Reinstatement of Administration" of the area, which included an office, schools, police, and other functions.

[12] The disaster highlighted the need for proper fire prevention in the largely wooden-built squatter areas, complicated by the lack of political ties with the colonial and Chinese governments.

[13][14] With no government enforcement from the Chinese or the British aside from a few raids by the Hong Kong Police, the walled city became a haven for crime and drugs.

[4] Beginning in the 1950s, triad groups such as the 14K and Sun Yee On gained a stranglehold on the walled city's numerous brothels, gaming parlours, and opium dens.

[18] A few of the streets were illuminated by fluorescent lights, as sunlight rarely reached the lower levels[16] due to the outstanding disregard to air rights within the city.

[4] Although the rampant crime of earlier decades diminished in later years, the walled city was still known for its high number of unlicensed doctors and dentists who could operate there without threat of prosecution.

Numerous small factories and businesses thrived inside the walled city, and some residents formed groups to organise and improve daily life there.

[21] An attempt by the government in 1963 to demolish some shacks in a corner of the city gave rise to an "anti-demolition committee" that served as the basis for a kaifong association.

[22] On 10 March 1987, following the announcement that the walled city would be converted to a park, the Secretary for District Administration formally requested the Urban Council to take over the site following demolition.

[23][24] The government distributed some HK$2.7 billion (US$350 million) in compensation to the estimated 33,000 residents and businesses in a plan devised by a special committee of the Hong Kong Housing Authority.

[34] The two-storey Sai Tau Tsuen settlement bordered the walled city to the south and west until it was cleared in 1985 and replaced with Carpenter Road Park.

[37] An informal network of staircases and passageways also formed on upper levels, which was so extensive that one could travel north to south through the entire city without ever touching solid ground.

[40][41] Kowloon Walled City's early population fluctuated between zero and a few hundred, and began growing steadily shortly after World War II.

[48] The yamen in the heart of the city was also a major social centre, a place for residents to talk, have tea or watch television, and to take classes such as calligraphy.

[54] Components of the park include: The Antiquities and Monuments Office conducted archaeological examinations as the walled city was being demolished, and several cultural remains were discovered.

[62] Among them were the walled city's yamen and remnants of its South Gate, which were officially designated declared monuments of Hong Kong on 4 October 1996.

[73] The city appears as a virtual reality environment (described by Steven Poole as an "oasis of political and creative freedom") in William Gibson's Bridge trilogy, and as a favourable contrast with Singapore in his Wired article "Disneyland with the Death Penalty".

[77] The 1984 gangster film Long Arm of the Law features the walled city as a refuge for gang members before they are gunned down by police.

[79] The 2006 Hong Kong horror film Re-cycle features a decrepit, nightmarish version of the walled city, complete with tortured souls from which the protagonist must flee.

[83][84][better source needed] In the manga Crying Freeman, the titular character's wife travels to the walled city to master her swordsmanship and control a cursed sword.

[87] The game Stranglehold, a sequel to the film Hard Boiled, features a version of the walled city filled with hundreds of Triad members.

[88] Concept art for the MMORPG Guild Wars Factions depicts massive, densely packed structures inspired by the walled city.

The atmosphere of the walled city was reflected in the arcade's narrow corridors, electrical wires, pipes, postboxes, sign boards, neon lights, frayed posters, and various other small touches.

Known as the Shibuya Kinmirai Kaikan (渋谷近未来会館), the venue hired Hong Kong artists to spray paint Cantonese graffiti on its walls to give an air of authenticity along with neon lights and posters.