Since the independence of Malaya, Sungai Lembing has gone into decline as global demand and prices of tin dropped, resulting in the closure of the mines in 1987.

[10] The development of the town to support the tin mining industry led to the creation of facilities and amenities such as electricity, housing for workers, schools, shops, a cinema and a hospital.

[1] Non-residents were usually not allowed to enter Sungai Lembing without permission and a security checkpoint was set up at the entrance to the town.

[10] In 1926, flooding in the area caused damage to 14.5 km (9.0 miles) of railway track, a hospital and 250 homes, and the mining operation was suspended for three months.

[4] Prior to 2001, the area's main industry shifted from mining to agriculture; deforestation caused by this change led to flooding becoming more frequent.

The proposals included plans to convert former workers' quarters into chalets to mitigate a lack of accommodations for visitors, improve the infrastructure in the town and open a health clinic.

[17] On 27 March 2004, as part of a national five-year economic plan, the federal government allocated RM 7 million for improving the town; this includes improvement to the museum, which was visited by 193,000 visitors as of 2004, revival of a mining tunnel for tourism purpose, restoration of the cinema and upgrading the road that connects the town to the tin mining area.

[23] On 31 August 2019, a fire burnt several century-old buildings including 20 shophouses, 11 terrace houses and a library.

[26] Four months after the fire, reconstruction of one of the damaged buildings took place with a budget of RM 10 million, with advice from Kyoto University; the money was also used to upgrade existing facilities in Sungai Lembing.

[27] During the COVID-19 pandemic, following the relaxation of the movement control order and the re-opening of border crossings, tourism began to recover to pre-pandemic levels; 80 per cent of stalls in the food court reopened and some hostels in the area were fully booked.

[31][3] Waste materials from abandoned mines were found to be polluting the area's rivers and groundwater with harmful elements such as arsenic, iron, copper, lead, manganese, nickel and zinc.

[33] Local villagers blamed the pollution of their water catchment area on the logging activity involved.

[36] As of July 2017, locals estimated around 2,000 to 3,000 tourists visited the town on every weekend, and the number peaks during school holidays in both Malaysia and Singapore.

[1] Places of worship include Gua Charas, where Buddhist and Hindu temples were located inside a cave.