The Formosan Aboriginal Culture Village first opened on July 27, 1986. It earned itself a reputation for its popular theme area which introduces Taiwanese Aboriginal culture and for its lush forest and beautiful European Garden. Since 1992, an amusement park and other entertainment attractions have been added to the village. The village has both educational and entertainment functions. Since its first opening, tourists have come to the village in droves. The establishment of the Formosan Aboriginal Culture Village helped Sun Moon Lake to regain its tourists.

Both the Han and the Thao live together in Rihyue (Sun Moon) Village. The architectural styles of these two tribes are very different, and this originally caused the streets to look confused and chaotic. This situation created great damage to the image of Sun Moon Lake. Thus, to solve this problem, the government of Nantou County carried out plans to reorganize the area streets during 1986.

The Overturning of the Yacht

With the opening of the Formosan Aboriginal Culture Village and the subsequent increase in tourism, the prosperity of Sun Moon Lake was on the verge of reviving. Unfortunately, an accident then occurred.

On the night of August 25, 1990, a yacht overturned, causing the deaths of 57 people, while only 25 survived. This shattering event affected people both at home and abroad, and discouraged them from visiting Sun Moon Lake, causing the area's prosperity to take a nosedive. Also, due to the static business, and dull architectural style, tourism decreased, and the development of Sun Moon Lake went from bad to worse.

The Revival Plans

To ameliorate this situation, the Nantou County Scenic Spots Administration engaged some experts to undertake the revival plans of Sun Moon Lake. Regarding the facilities, they renovated the wharfs, allowing them to conform to safety standards, and opened a road encircling Moon Lake. The road encircling Sun Moon Lake measures 33 kilometers in length. At first, it only encircled Sun Lake. During September of 1995, the Moon Lake section was finished. This allows tourists every visit every scenic spot around Sun Moon Lake.

The experts also mapped out two business areas - Mingsheng Street in Shueishe Village and Yiyung Street in Rihyue (Sun Moon) Village. In addition, with the hope of reviving tourism at Sun Moon Lake, the government co-operated with non-governmental organizations in holding various activities, such as Marriages on the Water, the 10,000 People Sun Moon Lake Swim, the Shueishalian Moon, the Return of Shueishalian's Grace, Thao Cultural Development Conventions, Sun Moon Lake Tourism Development Conventions, Thao Banquets, etc.