A Silk Road terminal, Dunhuang played a pivotal role in China's trade and cultural exchanges with the West in ancient times. Dunhuang Grottoes is a colossal treasure-trove of, among other things, 45,000 square metres of frescos and 2,415 painted sculptures. The discovery of Tripitaka Cave at Dunhuang 100 years ago uneiled one of mankind's important disciplines of learning: Dunhuang studies. The famous Mingsha (Humming Sand) Hill and Crescent Moon Spring are found south of Dunhuang, while to the north there is Yumen Pass on the Great Wall. The ruins of the Yanguan Pass lie south of the city.

Dunhuang was made a prefecture in 117 BC by Emperor Han Wudi, and was a major point of interchange between ancient China and Central Asia during the Han and Tang dynasties. Located in western end of Hexi Corridor near the historic junction of the Northern and Southern Silk Roads, it was a town of military importance. Its name is mentioned as part of the homeland of the Yuezhi or "Rouzhi" (月氏), but this mention has also been identified with an unrelated toponym, Dunhong. Edges of the city are threatened with being engulfed by the expansion of the Kumtag Desert, which is resulting from longstanding overgrazing of surrounding lands.Dunhuang is safe place for traders to cross.

Early Buddhist monks accessed Dunhuang via the ancient Northern Silk Road, the northernmost route of about 2,600 kilometres (1,600 mi) in length, which connected the ancient Chinese capital of Xi'an to the west over the Wushao Ling Pass to Wuwei and emerging in Kashgar.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 (see Jesus Sutras), testimony to the wide variety of people who made their way along the silk road. Today, the site is an important tourist attraction and the subject of an ongoing archaeological project. A large number of manuscripts and artifacts retrieved at Dunhuang have been digitized and made publicly available via the International Dunhuang Project.

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