The "Horse-rearing Island" lies 3 kilometres from Yantai in the Yellow Sea, and is about 10 square kilometres in size. Legend has it that in 219 BC, Emperor Qinshihuang visited this island, and was deeply impressed by the agreeable climate and lush grassland there. Then he issued a decree to name the island the "Imperial Horse-rearing Island" and horses of fine breeds were thereupon reared and tamed on this treasured island.

Nowadays visitors flock to this island for the weekly horse races. They are held on weekends on a modern racetrack with a total of ten thousand seats. The newly-developed "Heavenly Steed Bathing Beach" lies near the eastern tip of the island and has fine quartz sand. Other places for entertainment include the Xiyouji Palace, Ocean World and Jinxiu City.