Lao Shan is one of the places where Taoism first originated. About 7km east of the Old Stone Man beach; the mountain is one of Taoism's most important pilgrimage destinations. In the past, Taoist priests living on the mountain were conferred with special privileges. The mountain saw the most development during the late-Song and early-Yuan dynasties and was home to over 100 temples, each searching for "the Way" in solitude. Ancient travelers thought immortals lived on this scenic mountain and many legends grew out of that belief.

Lao Shan is now best known for its spring water, which isconsidered the best in China. It's also this spring water that made Qingdao famous for its beer. Not only is this water good for making people drunk, vegetables grown using this water are reputedly much tastier, something local fruit and vegetable peddlers will all point out.

There are many routes up the mountain and many hidden trails make it a joy to explore. Oddly, palm trees are abundant on Lao Shan despite being in the north, and note the varying vegetation at different elevations. At the end of Lao Shan Lu is the Palace of Great Purity, which is made of three pavilions. The main pavilionis Sanqing Pavilion, which houses a statue of Laozi, the founder of Taoism, and the mythical Jade Emperor. To the left of this pavilion is the Pavilion of the Three Emperors and to the right is the Pavilion of the Three Officials. These buildings were constructed during the Song dynasty to perform Taoist ceremonies. Beijiu Shui is just north of the Palace of Great Purity and is a wild area laced by rivers, streams and cascading waterfalls.

A cable car close to the Palace of Great Purity whisks visitors to Shangqing Gong at the peak of Lao Shan. Great views abound on Lao Shan, but make sure the strong ocean wind doesn't blow you off the mountain. South of the peak is the DragonPoolFalls. Because of the high winds, the water is blown into spray that resembles a thundershower more than a curtain of water. Be careful in this area and stay on the high ground away from slippery surfaces. Visitors have been blown off the mountain and into the sea.