This museum opened in 2008 in a Japanese-style building constructed in 1921 as a high-class hotel. The 1st floor features exhibits of various folk arts, such as cochin (koji) pottery, wood and stone carving, and puppetry. The 2nd floor preserves the look of the original tatami-floored banquet and performance hall. Outside are traditional gardens and decks overlooking the town and mountains. The teahouse offers tea and set meals in the afternoon.

To get here, take bus 230 from opposite Xinbeitou MRT station.