This thesis discusses the foundation myths, history and contemporary situation of Minyak Pel Lhagang Monastery (Mi nyag dPal Lha sgang dgon), a Sakya monastery located in Lhagang village, Dartsedo (Dar rtse mdo), in the Minyak (Mi nyag) region in Kham (East Tibet). My account of the monastery is based on material gathered during three months of fieldwork in Lhagang village. Lhagang Monastery is regarded as one of the most famous monasteries in the region, mainly due to the Jowo statue kept there, which many believe is of equal importance to the Jowo statue in Lhasa. To my knowledge, no research has so far been done on Lhagang Monastery and it is important to study its history before the existing written records disappear and the orally transmitted narratives are forgotten. Furthermore, a study of the monastery’s role in contemporary society will add to our knowledge of modern Tibetan monasticism. The first part of thesis gives a detailed presentation of two different accounts of the origin and historical changes of the monastery, and three defining moments in the history of the monastery: its transformation from the Kagyu to the Sakya school, the changes brought about by the Cultural Revolution, and finally the influence of modernity in the course of the last decades and the changes brought by new policies of the new millennium. The descriptions of the monastery are based on printed texts as well as data collected through interviews in contemporary Lhagang. The second part of thesis presents the basic layout of the monastery and a detailed description of summer ritual dance in the monastery. The last part of the thesis aims at shedding light on the relationship between the monastery and the local community, including both monks and laypersons’ views on the monastery as the changes in lifestyles, beliefs, economic progress, and expanded tourism have given the monastery a number of new roles in the community.