Originally known as the Hubei Arsenal, it was founded in 1891 by one of the Qing officials, Zhang Zhidong, who diverted funds from the Nanyang Fleet in Guangdong to build the arsenal. It cost about 250,000 pounds sterling and was built in 4 years. On 23 April 1894, construction was completed and the arsenal, occupying some 40 acres (160,000 m2), could start production of small-calibre cannons. It built rifles loaded with magazines, Gruson quick fire guns, and cartridges.
On 14 June 1894, an industrial accident started a fire in the arsenal that destroyed all the equipment and most of the structures in the arsenal. $1,000,000 in damages were reported. In July of the same year rebuilding began, and in August 1895, all was back to normal and the arsenal started production of German M1888 Commission rifles, locally called 7.92 cm Type 88 Mauser rifle (even though the Commission rifle was unrelated to the Mauser). At the same time, ammunition for the rifle were being produced at a rate of 13,000 rounds per month.
500,000 taels were spent annually in the arsenal, which constructed Mauser rifles and used steel from the works around Hanyang. Iron and coal mines surrounded the area. 160,000 Mausers were purchased by the Chinese military, along with mountain guns and small caliber versions. Smokeless powders was produced for guns at the a factory next to the arsenal. The arsenal itself built 40 Mausers a day, 6 field guns a month. Every day the following was manufactured: 300 shells, 35,000 rifle cartridges, 1,000 pounds smokeless powder. They were moved via Yangzi river until reaching Wuchang. Fortifications across China in the interior and on the coast received these weapons.
During the Boxer Uprising of 1900, the arsenal supplied the Boxers with more than 3,000 rifles and 1 million rounds of ammunition.
In 1904, the arsenal made several modifications to their design of the Type 88, and, at the same time, production capacity was expanded to 50 rifles and 12,000 rounds of ammunition per day. For a time in 1910, the arsenal switched to producing the Type 68 rifle, at a speed of 38 per day.
The quality of the firearms produced in this period was generally low, because the local steel foundries were often ill-equipped and badly managed.
Because of its proximity to Wuchang, the revolutionaries, during the Wuchang Uprising of Xinhai Revolution, largely equipped themselves with foreign and locally made weapons stored at this arsenal - some 7,000 rifles, 5 million rounds, 150 pack guns and 2,000 shells. The arsenal, in support of the revolution, switched into full gear and began producing weapons and ammo day and night.
The Republic of China expanded the arsenal numerous times, and production soared. Quality, however, remained low. In 1917, a training school was established alongside the arsenal. In 1921, production began on copies of the Browning M1917 and the Mauser M1932 "Broomhandle" pistol. In 1930, the design of the Type 88 was once again modified, extending the bayonet. In 1935, a version of the Maxim gun--the Type 24 HMG—was being produced, based on blueprints from the German M08.
As the Imperial Japanese Army approached Hanyang and Wuhan in 1938, the arsenal was forced to move to Hunan, with parts of its assets transferred to various other arsenals across the country. At Hunan, it continued production of the Type 88 rifle and carbine, and also Chinese version of 88 or Type Chungcheng style rifle.
With the Allies' victory in 1945, orders to the arsenal gradually stopped, and, on 1 July 1947, the arsenal was shut down. Many of the senior employees transferred to Taiwan and built the basis of today's Taiwan arsenals.
Firearms produced 
|This section requires expansion. (May 2008)|
- Type 88 rifle
- Type 68 rifle
- Chiang Kai-shek rifle
- Type 24 HMG
- Mauser C96 7.63 mm pistol
- M1917 Browning machine gun
- Kathleen L Lodwick (2009). The Chinese Recorder. BiblioBazaar, LLC. p. 414. ISBN 1-115-48856-2. Retrieved 2010-06-28.
- Anon (2009). Northern China, the Valley of the Blue River, Korea. 43 Maps and Plans. READ BOOKS. p. 386. ISBN 1-4446-7840-X. Retrieved 2010-06-28.
- The Chicago daily news almanac and yearbook ...., Volume 1922. CHICAGO: The Chicago Daily News co. 1895. p. 376. Retrieved 2010-06-28.(Original from the University of Michigan)
- Henry Romaine Pattengill (1900). Timely topics, Volume 5. p. 153. Retrieved 2010-06-28.(Original from the University of Michigan)
- United States. Bureau of Foreign Commerce, United States. Dept. of Commerce and Labor. Bureau of Statistics, United States. Bureau of Manufactures (1904). Commercial relations of the United States with foreign countries during the years ..., Volume 2. WASHINGTON: G.P.O. p. 398. Retrieved 2010-06-28.(Original from Harvard University)
- This article incorporates text from The Chicago daily news almanac and yearbook ...., Volume 1922, a publication from 1895 now in the public domain in the United States.
- This article incorporates text from Timely topics, Volume 5, by Henry Romaine Pattengill, a publication from 1900 now in the public domain in the United States.
- This article incorporates text from Commercial relations of the United States with foreign countries during the years ..., Volume 2, by United States. Bureau of Foreign Commerce, United States. Dept. of Commerce and Labor. Bureau of Statistics, United States. Bureau of Manufactures, a publication from 1904 now in the public domain in the United States.