The area was first settled in 1880 by granite miners. In the early 1900s, Hong Kong Island's brothels were moved from Possession Point in Sheung Wan to this area under orders from the Hong Kong Governor Matthew Nathan. The place thus flourished as a red light district and came to its golden period. During this period, affluent Chinese in Hong Kong came to Shek Tong Tsui for entertainment, and numerous Cantonese opera theatres and Cantonese restaurants were founded in the area. It was known locally in the Cantonese phrase "tong sai fung yuet" (), which means "good times west of the pond". Brothels in this area inspired numerous novels and Hong Kong films, most notably "Rouge "(1987), starring Anita Mui and Leslie Cheung.