The Garden of Virtue and Harmony (德和园 De He yuan) is where the Emperors and the Empress Dowager Cixi were used to be entertained. Performances of the Peking opera and many other theatrical shows were used to be held there for the pleasure and entertainment of the Imperial family. This garden consists of the Grand Theater Building, the Hall of Nurtured Joy, and the Dressing House.

The theatre building, 21 meters high (69 feet) and 17 meters wide (56 feet), consists of three stories stages with colorful and multiple eaves elegantly raised on every corners. From top to bottom, there are: The Fu Stage (Happiness Stage), The Lu Stage (Affluence Stage), and The Shou Stage (Longevity Stage).

Some inventive raise catwalks in the ceilings and a winch on the top of the floor are present, an ingenuous design that could create an impression of movement to the performers. Each stage was made of trapdoors. A well and pond is located beneath the Shou Stage (Longevity Stage) for it could suddenly come out creating a water scene as well as amplify a sound effect thanks to acoustic resonance. The lighting and sound systems heighten the whole effect.

Today, the garden is converted into an exhibition hall to display the daily utensils used by the Imperial family, including bronze wares, porcelains, jade articles and other precious objects.