Dali and Yunnan's capital Kunming are only a 40-minute flight apart. The "new city" is known as Xiaguan and is south of the old city. The old city was built during Ming Dynasty emperor Hongwu's reign (1368–1398). Owing to the distance between them, the old city is still peaceful and quiet.

Dali is one of Yunnan's most popular tourist destinations, both for its historic sites and the "Foreigners' Street" that features western-style food, music, and English-speaking business owners, making it popular among both western and Chinese tourists.