The history of modern Omihachiman dates back to the late 16th century, during the Azuchi-Momoyama period. The city was founded in 1585 by the feudal lord Toyotomi Hidetsugu, nephew of the famous unifier of Japan, Toyotomi Hideyoshi. The heart of the new settlement was Hachimanyama Castle, built atop the mountain of the same name. The town was established as a jokamachi—a castle town divided into specific zones for samurai and commoners.
A key factor in the rapid development of Omihachiman was the ingenious engineering of its founders. The Hachiman-bori canal was excavated, connecting the castle's defensive moat with Lake Biwa—Japan's largest freshwater lake. This decision provided the city with several strategic advantages:
- Direct access to water trade routes connecting different regions of the country.
- The ability for merchant vessels to sail directly into the city center for unloading.
- The transformation of the town from a military outpost into a flourishing commercial hub.
Even after the castle was abandoned in 1595, the city did not lose its significance. On the contrary, thanks to the free-trade policies introduced at its founding, Omihachiman became the birthplace of the famous Omi merchants (Omi shonin). These traders, known for their "sampo-yoshi" philosophy (good for the seller, good for the buyer, good for society), established a powerful economic base, turning the city into one of the wealthiest commercial centers in the Kansai region.