Pingyao is an exceptionally well-preserved example of a traditional Chinese county-level city, established in the 14th century. 

In ancient times, the city wall was the image of Chinese cities, which formed the basic framework of the city. Like many other cities in China, Pingyao city also began to take shape from the building of the city wall. Records state that the city wall of Pingyao was initially founded by Emperor Xuanwang during the West Zhou Dynasty (827BC-782BC), having a history of 2,700 years so far. Since 221BC, Pingyao has always been a site of county jurisdiction, a grassroots city in China. Today’s city wall preserves the original state, plus an extension which was made in 1370. The old city still retains its layout from the Ming and Qing Dynasties, with about 4,000 ancient-style residences and 100 historical streets and storefronts in the ancient city at the present time.

Pingyao is also one of the cradles of the Jin businessmen who were famous in the late Qing Dynasty. The foundation of the first modern bank in China was born in Pingyao, named “Rishengchang”. During that time, there were over 20 financial institutions in the city, which comprised more than half of the entire country's total at that time, making Pingyao the financial center of China in those times.

In February 1938, the Japanese invaders invaded the Pingyao County. After the founding of the People's Republic of China, the party and the people's government pay more attention to the protection of Pingyao Ancient City, they allocated money to maintenance Dachengdian of Confucian Temple, Shuanglin Temple and other cultural relics. 

In 1986, Pingyao was designated as the national famous historical and cultural city by the State Council. It was listed as a World Cultural Heritage in 1997 because that it shows an unusually complete picture of cultural, social, economic, and religious development over five centuries.