Shan Pui Tsuen was founded by Lam Siu-yuen (林兆元), a 13th generation member of the Lam Clan, who moved from Tai Wai Tsuen some 200 years ago. Historically, the village was facing a large piece of fishing ponds.
Shan Pui Tsuen is part of the Tung Tau alliance (東頭約) or "Joint Meeting Group of Seven Villages", together with Nam Pin Wai, Tung Tau Tsuen, Ying Lung Wai, Choi Uk Tsuen, Wong Uk Tsuen and Tai Wai Tsuen. The Yi Shing Temple in Wong Uk Tsuen is an alliance temple of the Tung Tau Alliance.