Its water came from a stream in the nearby valley of Liu To and its outlet was at Tsing Yi Bay.
[1] It acted as the shelter for nearby boat people, especially after large-scale land reclamation in Tsuen Wan and Kwai Chung.
The lagoon was unable to escape the fate of development.
Both the lagoon and the neighbouring Tsing Yi Bay, were reclaimed for new towns.
[2][3] After reclamation, the northern portion became Tsing Yi Estate and the remainder became temporary housing areas, which were later demolished.