Construction of the Garden of Virtue and Harmony (Deheyuan) commenced in 1891 and was completed in 1895. It was designed as a theatre for the Empress Dowager Cixi, and consists of a theater building, and two halls, Yiledian (Hall of Nurtured Joy) and Qingshantang (Hall of Celebrating Benevolence). It is the largest of the three famous theaters built in the Qing Dynasty (1644-1911), the other two being the Changyin Pavilion of the Forbidden City and the Qingyin Pavilion of the Mountain Resort in Chengde, Hebei Province.

The theatre building, 21 meters (69 feet) high and 17 meters (56 feet) wide, consists of three storeys with colorful multiple eaves and elegantly raised corners. With raise catwalks in the ceilings and a winch on the top floor of the building, performers could seem to come down from the 'heaven' or emerge out of the 'earth'. Beneath the ground floor, there is a well and ponds which could spout suddenly to create a water scene. The lighting and sound systems heighten the whole effect. In the past, when there was thunderous clamor on the stage, Empress Dowager Cixi would enjoy the play cozily in the Hall of Cultivated Joy and afterwards rested at the Hall of Celebrating Benevolence.

Now, the garden has been converted into exhibition halls to display the daily utensils used by the imperial family, including bronze wares, porcelains, jade articles and other precious objects.