In the 19th century Žagarė became famous as a birthplace of prominent Rabbis and Jewish intellectuals. One of them was Rabbi Israel Salanter Lipkin (1810–1883) – initiator of religious Musar movement. Another Žagarė-born world-famous person was philanthropist and Zionist Kalonim Vulf Visocky (1824–1904), who established tea industry company „Wissotzky tea“ in Moscow, and which is successfully operating until this day, but has moved during the horrors of the 20th century overseas to New York. The small town of Žagarė itself can be proud of both extant cultural and daily life heritage of local Jewish community and the way locals honour the memory of Jews in Žagarė – even on the private houses in Žagarė there are memorial plates reminding about the Jewish families, that lived in these houses before the Holocaust.
The river of Švėtė divides the town of Žagarė into two historical areas: the Old Žagarė on the left and the New Žagarė on the right bank of the river. Since the 16th century both Žagarės were developing as autonomous towns and they were joined together only in the beginning of the 20th century. Due to this division local Jews also had two separate communities, which stayed that way even after both Žagarės were administratively declared as one town. The existence of two separate Jewish cemeteries on both sides of Švėtė, which were used as burial places up until the Second World War, indicates that these communities have never been reintroduced as one joint community. Jewish communities were granted the right to settle in both these towns at the beginning of the 18th century when this territory was economically weak and empty after the North war and plague. Jews started to settle here in the centres of these towns, surrounding the market squares.
In the New Žagarė historical Jewish quarters include current streets of Vilnius, Kęstutis, Joniškis and P. Cvirka. The Jewish settlement in this part of the town was determined by the economic activities characteristic for Lithuanian Jews – trade, crafts or providing various services. Although there were some rich businessman, who dealt with import and export to neighbouring Latvian towns, but the majority of Jews from Žagarė had much smaller businesses – in the town center, in small houses one closely attached to another were a cluster of various shops: Miesto sq. 21 was a Jewish barber, Miesto sq. 62 stood a mill, Miesto sq. 65 was a wool comb place, Kęstučio str. 15 worked a famous Jewish midwife, who assisted mothers of any ethnicity or religion. Close to the synagogue complex on P. Avižonis str. also stood a mikveh (Avižonio str. 18), and on the banks of Šventė river, on the Malūnas str. was a ritual slaughterhouse, important to every religious Jewish community, which aims to keep up with kashrut. Market square and 19th century Jewish houses surrounding it survived very well in Naujoji Žagarė. In this market square and the streets around it local Jews had various shops, artisan workshops, bakery, inn, there were barbers and photographers working as well. At Rauktuvės str. 1 now we find a small restaurant “Raktė” – this place was also a restaurant during the interwar period and it was one of the most exquisite places in the town, co-owned by Lithuanian and Jew together.