[9] "Tamsui" is consistent with Hokkien literary readings,[10][11] and (possibly by chance) is equal to the Church Romanization of an older pronunciation (Tām-súi) minus tone markings and hyphen.

The spelling "Danshui" (from Hànyǔ Pīnyīn Dànshuǐ), formerly used officially by the Taiwan government, Taipei Metro, and other sources, is based on the Mandarin pronunciation.

[16] Because of its proximity to mainland China, as well as its location in a natural harbor, Tamsui quickly became a major fishing and trade port.

In 1862, the Qing government opened Tamsui to foreign trade under the terms of the Treaty of Tientsin, exporting tea, camphor, sulfur, coal, opium, and dyes.

By the mid-19th century Tamsui had become the largest port in Taiwan, boasting a sizable foreign population as well as a British consulate at Fort Santo Domingo.

[17][18] Canadian medical doctor and missionary George Leslie Mackay arrived in Tamsui on 9 March 1872, proceeding to establish Taiwan's first hospitals in Western medicine and formal educational facilities, including Oxford College (now part of Aletheia University), the oldest European-style higher-education institution in Taiwan by some measure.

Liu Mingchuan, who was leading the defence of Taiwan, recruited Aboriginals to serve alongside the Chinese soldiers in fighting against the French.

However, public infrastructure construction projects by the Japanese led to Tamsui's rise as a local administrative and cultural center.

Following the completion of the Taipei Metro's Tamsui Line in 1997, the town experienced a sharp increase in tourist traffic, reflected in the completion of several riverside parks, the growth of open-air markets specializing in traditional handicrafts and street-stall snacks, the construction of a fisherman's wharf, and the increase in passenger ferries traversing across and along the river.