Located at the northwest of Gansu Province and bordering with Xinjiang Uygur Autonomous Region and Qinghai Province, Dunhuang is an oasis town under the administration of Jiuquan City (where China Satellite Launch Center is based). It covers an area of 31,2 square kilometers with a population of 130,000.

Dun in Chinese means "grand", Huang means "prosperity". During Han and Tang Dynasty, it was a major point of interchange between China and the outside world – a stopping-off post for both incoming and outgoing trading caravans. Dunhuang was made a prefecture in 117 BC by Emperor Han Wudi. Located near the historic junction of the northern and southern Silk Roads, it was a town of military importance.

For centuries Buddhist monks at Dunhuang collected scriptures from the west, and many pilgrims passed through the area, painting murals inside the Mogao Caves or "Caves of a Thousand Buddhas". A small number of Christian artifacts have also been found in the caves, evidence to the people from Europe who made their way along the Silk Road. Today, the site is a popular tourist attraction and the subject of an ongoing archaeological project.

Dunhuang lives on agriculture. In recent years, tourism is booming fast and becomes a new economic propeller. Dunhuang's city centre is relatively highly developed, including much commercial activity and many hotels. Bookshops and other souvenir shops sell materials relating to the Caves and the history of the region. A night market is held in the city centre, popular with tourists. Many souvenir items are sold, including such typical items as jade, jewelry, scrolls, hangings, small sculptures, and the like.