The Old Town Centre of Dali (or Dali Gucheng) is, along with Yangshuo near Guilin, one of China's backpackers' paradises. Dali Gucheng was first built in the 15th year of the reign of Emperor Hongwu during the Ming Dynasty. The streets and alleyways criss-cross the town in a typical "chess-board" pattern. Streams from Cangshan Mountain in the west flow through the city to join up with Erhai Lake in the east. Many of the buildings in Dali Gucheng are built in the architectural style of the ethnic Bai people, witb blue-tiled roofs and tall walls in gray and white.

One of the main attractions in Dali Gucheng for foreign travellers is Huguo Lu, also known with locals as Yangren Jie or "Foreigners' Street". This street is lined with cafes and guesthouses along with souvenir shops and other interesting stores, and cheap beer, Western food and loding are readily available.