Located on the East Lamma Channel off the coast of Wah Fu Estate and Cyberport at Telegraph Bay, it is named after the waterfall that flows into it.

[5] The waterfall became well known among British and European sailors,[1][6] who would refill their fresh water supplies directly from the falls[7] on their journey towards other ports in Asia, such as Galle, Ceylon, and Malacca, Malaya.

[8] This brought about the city's reputation for its abundant supply of drinking water, one of the few places on the coast of China to have such a resource.

[1] Due to the bay's strategic location overlooking the Lamma Channel, it was utilised by the British during the Second World War to defend the colony from the Japanese.

A pillbox and searchlight—known as a Lyon Light—was constructed;[3][9] the former served as a bunker for Allied soldiers during the Battle of Hong Kong.