The Taosi late Neolithic site is located in Shanxi Province in north-central China. Three decades of excavation have unearthed storage pits, dwellings, and many artifacts, identified as the Taosi culture type (4300 to 3900 BP). Recent excavations led to the discovery of the tombs of chiefs of the Early Taosi period, and the largest walled-town in prehistoric China. A semicircular foundation built in about 4100 BP along the southern wall was also discovered. The design of the raised terrace within it would have permitted observations of sunrise at specific dates along the eastern horizon. Here we report on what has been learned about this fascinating site, and analyze its astronomical features and function.