Sage Jamadagni, in a moment of anger, commanded his son Sage Parasurama to chop off the head of his wife, Renukadevi, as she had admired the reflection of a Gandharva in water. Obeying his father, Parasurama carried out the command but later asked for his mother’s life as a boon. She was brought back to life, but both father and son were burdened by the sin of their actions. They worshipped Lord Shiva at this temple seeking peace and forgiveness. Lord Shiva granted them darshan and absolved their sins.
Mother Mahalakshmi also worshipped Lord Shiva here and received His blessings. As a result, the Lord is revered as Mahalakshmeeswarar.