Chinese riddles are closely connected with the shape, pronunciation or meaning of Chinese characters. A line in the fifth-century work of literary criticism Wenxin Diaolong (The Literary Mind and the Carving of Dragons) by Liu Xie of the Northern Dynasties Period (386-581) says, "Riddles, by mixing up words, create puzzlement." Riddles based on the structure of Chinese characters appear first in a work of the fifth century.

The practice of rewarding a prize to the person who guesses a riddle correctly goes back at least as far as the Emperor Gaozu of the Northern Wei Dynasty (386-534). He once raised his cup and said:

Three, three across;

Three, three up;

Whoever guesses

Gets a gold cup.

The cup went to a minister who correctly guessed the Chinese character the emperor was describing.

Since the Song Dynasty (960-1279), guessing game of riddles has been popular and begun to take various forms. Because in the Lantern Festival, riddles were put on lanterns for people to guess the answers, riddles were also called lantern riddles. Nowadays, this custom is still practiced in many places across China.

The relations between riddles and their answers have many varieties. Some riddles are created according to grapheme or meaning of a character and some, according to illusion of a character. Some riddles make use of characters to guess proverbs, Xiehouyu (a two-part allegorical saying) and so on.