Kaesong is located in the central part of the Kaesong basin on the west coast, in the middle part of the Korean peninsula. It was formerly called Songdo ("City of Pine") because it is surrounded by pine-covered mountains.

One of the oldest cities of Korea, Kaesong was the capital city of Koryo, which was the first unified state on the Korean peninsula, for about 500 years beginning from 918, where the Koryo culture flourished. Since early times Kaesong enjoyed a certain level of development of the handicraft industry that produced Koryo ceramics, brassware, paper, Indian ink and other stationery and bamboo goods that were in great demand in the Song dynasty of China as valuable goods. The city was an ancient cultural centre, a sumptuously wealthy and sophisticated metropolis, crowded with Buddhist aristocrats. It remained the Korean capital until 1392, when the Yi dynasty moved the capital to Seoul.

From the latter half of the 15^th century it became a major commercial centre of the country together with Pyongyang.

Intersected by the 38^th parallel, Kaesong served as the main contact point between North and South Korea from 1945 to 1951 and passed from United Nations to North Korean forces several times during the Korean War. In 1951 it was chosen as the site of the first truce talks. After the war Kaesong was included in North Korea.

After it was incorporated into the northern half of Korea in 1950 during the Korean War, it developed industry based on up-to-date light industry and developed agriculture. Now Kaesong, the city near the military demarcation line, has been built up as a modern city and as a tourist resort. Kaesong is important chiefly for its exports of ginseng, a valuable medicinal root, that has been exported to China and Southeast Asian countries since ancient times. Kaesong is also a notable cultural and educational centre. It is an industrial and trade centre famous for its porcelain.

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