“There is only one valley of Blue Moon, and those who expect to find another are asking too much of Nature” (Hilton 63). After the First World War in the 1930s, several war-persecuted Europeans discovered the Shangri-La utopia in China. This essay uses imagology to analyze the foreign culture in Lost Horizon from both character and setting perspectives and the cultural conflicts of the Orient and the Occident. Written by James Hilton, Lost Horizon adequately illustrates the image of Tibet from a Western perspective of that era. Mystical Shangri-La is scenic and full of romantic fantasy, a symbol of peace and tranquility. Apart from the remarkable scenery, the book also contains inequalities between the social status of East and West, especially the prejudiced contempt and discrimination against the Chinese people in Tibetan areas. Lurking in the background are omnifarious ethnic, political and cultural conflicts and severe oppression. Behind the yearning for an Eastern land is the Eurocentrism, colonialism and racial superiority rooted in Western ethnicity.