Ayer Itam (formerly spelt as Air Itam) is a suburb of George Town in the Malaysian state of Penang. Nested within the central valleys of Penang Island, it is located approximately 6 km (3.7 mi) southwest of the city centre. Ayer Itam is one of the well-known places to sample Penang cuisine, and includes a handful of major tourist attractions such as Penang Hill and Kek Lok Si Temple.
 The area now known as Ayer Itam was first developed in the late 18th century, soon after the founding of Penang Island by Captain Francis Light in 1786. British officials intended to turn Ayer Itam, including Penang Hill, into an agricultural area and established spice farms. To this day, fruits and vegetables are still grown at the hills of Ayer Itam; fresh produce are then brought downhill daily to the wet markets throughout George Town.
 Ayer Itam got its name from the murky waters of the Air Itam River (Malay: Sungai Air Itam). The phrase 'Air Hitam' means black water in Malay.
 Soon after the founding of Penang Island in 1786, British East India Company officials, led by Captain Francis Light, began exploring and clearing the interior of the island for agricultural purposes. Pepper and nutmeg farms were then established at the hills of Ayer Itam, while Light also commissioned the planting of strawberries at Penang Hill. The Anglo-Indian Suffolk House, one of Light's residences, was also built within a pepper estate by the Air Itam River.
 The agricultural village of Ayer Itam grew throughout the 19th century, populated by farmers who owned the fruit and vegetable farms at the surrounding hills. To this day, fruits and vegetables are still produced at the hills of Ayer Itam and then distributed daily to the wet markets all over George Town.
 In 1890, construction of the Kek Lok Si Temple, now one of the largest Buddhist temples in Southeast Asia, commenced. Its main pagoda combines Chinese, Siamese and Burmese styles. The temple was finally opened to the public in 1905.
 Ayer Itam was once home to the Penang Zoological Gardens, the first zoo in Malaysia. Supposedly opened in the 1920s by a monk named Fa Kong, the zoo was shut down for good prior to World War II due to the excessive maintenance costs.
 The Great Ayer Itam Fire of 1935 destroyed more than 100 homes in the area. At the time, the residences at Ayer Itam were mostly wooden; this incident led to the construction of brick buildings within the suburb.
 The area was also a hinterland which hid refugees fleeing from the episodes of violence that had occasionally erupted in the city. For instance, the Penang Riots of 1867 forced some residents within the city centre to evacuate to Ayer Itam. World War II, however, brought even greater numbers of refugees to the suburb. During the war, when the Imperial Japanese Army implemented the Sook Ching purges, Ayer Itam became one of the sites where Chinese civilians were massacred.
 The urbanisation of Ayer Itam since the 1950s has brought about a concurrent increase in living standards and transformed the landscape with more high rises, making the suburb one of the more densely populated areas in George Town. A new township named Farlim was also developed to the southeast in the 1980s.
 Located in the valley between Batu Lanchang Hill, Bukit Penara and Penang Hill, this suburb of George Town is connected to the city centre by two main roads, Ayer Itam Road and Batu Lanchang Lane. It is also connected to Paya Terubong and the south of the island via Paya Terubong Road.
 The suburb covers a broad area that incorporates Farlim, Thean Teik Estate, Rifle Range, Kampung Bahru, Kampung Melayu, Hill Railway Road and Hye Keat Estate, extending as far east as the junction with York Road.
 Ayer Itam Road, which snakes its way from the city centre all the way towards Paya Terubong, remains the major thoroughfare at Ayer Itam, with a total length of about 4.5 km (2.8 mi). Other major roads, such as Batu Lanchang Lane, Thean Teik Road and Thean Teik Highway, have been widened to cope with the increasing traffic.
 Ayer Itam is also famous for Malaysia's only operating funicular rail system, the Penang Hill Railway. Designed and opened in the 1920s, this funicular rail, which climbs Penang's tallest hill, was originally equipped with Swiss coaches. It has since been upgraded twice – in 1977 and 2010. The present-day Swiss-made coaches have a capacity of 7,500 kg (16,500 lb) and is capable of reaching the peak of Penang Hill from the base station in as little as five minutes.
 Rapid Penang buses 13, 200, 201, 202, 203, 204, 306 and 502 serve the residents of the suburb, by connecting Ayer Itam with various destinations within the city, including the city centre, Paya Terubong, the Penang International Airport, Queensbay Mall and Balik Pulau. These routes are complemented by Rapid Penang's Congestion Alleviation Transport (CAT), a free-of-charge transit service within Ayer Itam.
 Another bus service that caters specifically to tourists is the Hop-On Hop-Off service, which utilises open-topped double-decker buses. The Hop-On Hop-Off service includes stops at Penang Hill Railway Station and Kek Lok Si Temple.
 A total of 10 primary schools, three high schools and a technical school are located within Ayer Itam. Notably, the suburb is home to Chung Ling High School, one of the premier Chinese schools in Penang. Founded in 1917, it has retained the consistent academic performance of its students.
 The schools at Ayer Itam are as listed below.
 Primary schools
 High schools
 Technical school
 At the time of writing, the sole shopping mall at Ayer Itam is All Seasons Place, which was opened in 2012. It is the first and only strip mall in Penang, where the retail outlets and eateries are arranged linearly along a sheltered sidewalk that faces Thean Teik Highway.
 In addition, the hypermarkets and smaller supermarkets within the suburb, such as Sunshine Farlim, offer more local brands at cheaper prices, thus catering to the needs of the local community.