Shuilian Cave (the cave with water curtains), lying halfway of the cliff in the north of South Hill in Yunmeng Basin, is a place where Master Guigu secluded himself from the outside world, yet a place where Mr. Guigu gave lectures to his disciples.
The cave, 10 meters high, 6 meters wide, 80 meters deep is naturally formed. In the cave, numerous fancy stalactites hang on the ceiling from which water drops are falling, producing melodious sounds like ancient Chinese music. A waterfall, like a curtain, runs over the outlet of the cave, so Shuilian Cave is named after it. Just like a poem puts it that the white waterfall like a curtain hangs over the cave, outside red peach blossoms are in full bloom. Deep in the cave there is a spring with sweet and clear water. In summer and autumn, the spring overflows from cave, forming an overhanging waterfall pouring down into Yingrui Pond.
On the upper left side of the outlet of the Cave are engraved six Chinese characters meaning the reclusive place for Master Guigu. On the right side of the outlet stands a life-like statue of Master Guigu, 3.5 meters high, with his right hand holding bamboo slips (a kind of ancient books in China), seeming to impart his knowledge to his disciples.