Hang Hau got its name from a large water channel (水坑) that led to the sea. In days gone by, Hang Hau was on the sea front, facing Junk Bay. Many of the place names in Hang Hau reflect this - Shui Bin Tsuen means Waterside Village, for example. Now, about two-thirds of Hang Hau is on reclaimed land, and the sea is far away.
Between the 1960s and 1980s, Hang Hau was a large ship scrapyard area.
Long before the development of Tseung Kwan O New Town, Hang Hau was near settlements such as Hang Hau Village, Boon Kin Village and Tin Ha Wan Village. Hang Hau Village was located at the current site of the Tseung Kwan O Hospital, which was moved after the new town's development.
There has been a proposal to build Hang Hau New Town. It was considered because it is near the urban area, but it was put aside owing to the high cost of reclaiming the deep Junk Bay.