Japan then turned its attention to Russia's retreating armies in Manchuria to the north, where its army of 250,000 soldiers routed some 320,000 Russians in the bloody battles of Liaoyang and Mukden.
As Port Arthur was falling, Russian Tzar Nicholas II dispatched his Baltic Fleet half way around the world but it arrived too late and was wiped out in the Battle of Tsushima in the Strait of Japan in one of the biggest naval battles ever.
"Historically this war showed the extent of world imperialism at the beginning of the last century with two belligerent powers fighting a war on the soil of a third country," said Guan Jie, co-author of The Japanese-Russo War, a book published earlier this year.
"The Qing government was too weak and too corrupt and could not defend China against the advanced weapons of the invaders."
Russia and Japan, both exhausted from the war and unable to achieve decisive victory in Manchuria, reached a peace agreement in the September 1905 Treaty of Portsmouth, brokered by the United States.
With the end of the war, Japan began a 40-year occupation of Port Arthur and the bustling seaport of Dalian, 60km to the north.
A month after Tsushima, uprisings caused by general discontent, including Russia's humiliating defeat to Japan, erupted across Russia in the first revolution that lit the fuse of the 1917 Bolshevik Revolution.
"At the end of World War II, the Soviet Union armies liberated Dalian and Port Arthur, so this is why we say that 2005 marks the 60th anniversary of Dalian's liberation," Guan said.
Locals tend to ignore the fact that following liberation Port Arthur remained in Soviet hands until 1955 when Josef Stalin finally agreed to return it to Chinese sovereignty.
Today the green, rolling hills around Lushun are silent of gun fire, although war memorials and buildings built by Japan and Russia remain key fixtures.
The port is now home to China's nuclear-powered submarine fleet and remains a strategic naval base protecting the mouth of the Bohai Sea and the cities of Beijing and Tianjin to the west.
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