The hill offering a breathtaking view of the spa town of Karlovy Vary in the valley below was discovered for tourism by local cutler Václav Drumm in 1804. With his uncle, historian and chronicler August Leopold Stöhr, they hewed their way through the thick woods and placed two resting stools at the lookout point. Contemporary guides promoted the site as a lookout with the best view of the spa throughout the 19th century.
The funicular leading to the top of the hill was built in 1909 and a hunting lodge with an adjoining observation tower were constructed by the firm of local builder František Fousek according to the design of architect Anton Breinl also from Karlovy Vary between the years 1912 and 1914. The grand opening of the new observation tower took place on 27 May 1914. The site immediately became a popular outing destination of the spa guests. After World War I, the observation tower was named after Hans Kudlich (1823-1917), a former member of the Austrian Imperial Assembly and an Austrian revolutionary who, among other things, formulated the proposal for the abolition of servitude, and for a short period after the end of World War II in 1945, it was named in honour of President Edvard Beneš. The name Diana ultimately prevailed.
The Diana Observation Tower is a massive tetragonal brick structure with bevel corners erected on a prismatic stone base and complemented with a covered wooden gallery with a lookout platform. Its total height is 40 metres. The lookout gallery is located at the height of 35 metres and it is accessible by climbing 150 wooden counterclockwise winding stairs or by a lift. The tower offers an unobstructed view of practically the entire city, the valleys of the Ohře and Teplá Rivers, as well as of the major part of the spa woods. To the north, you may admire the Ore Mountains with Klínovec, the Doupov Mountains to the east, and the Slavkov Forest to the southwest. Under good visibility conditions, you may see the tops of the Smrčiny Mountains (Fichtelgebirge) in the west-south-west direction and in clear weather, you may see to a distance of almost 70 kilometres.
Since 1981, the Diana Observation Tower has been included in the list of cultural monuments.
The most notable guests who had visited Diana in the past included, among others, Goethe, Körner, or Freud.