The Kuan Yin Temple was built in the 1800s by early Chinese settlers of the Hokkien and Cantonese communities. The temple was originally named Kong Hock Keong temple (Cantonese-Hokkien Temple) and was once used not only for religious but also social functions within the Chinese community.

The Goddess of Mercy Temple, or Kuan Yin Temple, is the first temple built in George Town, Penang, by Chinese settlers. The temple honours Kuan Yin, a Boddhisatva who attained Nirvana but had chosen instead to remain on earth in order to provide guidance and help to those who are striving to reach Nirvana. The temple interior is usually filled with the scent of sandalwood incense, burnt by devotees who visit the temple to pray and seek guidance.

The temple also honours Ma Chor Poh, the patron saint of seafarers, who was highly regarded by the Chinese settlers, many of whom had once travelled great distances, crossing the seas from China to Penang.

The temple's charming features like the dragon-entwined pillars, carved from a type of green stone supporting the temple's high roof is very impressive. Throngs of visitors will come to worship the Goddess especially on the first and fifteenth of every lunar month, and on the Goddess of Mercy's feast days, which are on the 19th day of the 2nd, 6th and 9th month of the lunar calendar. These feasts days mark the anniversaries of the Goddess birthday, initiation, and attaining Nirvana. It is a common sight for puppet shows and Chinese operas, staged on the temple premises to honour her.