In Treta Yuga, Lord Anjaneya, the devoted envoy of Lord Sri Rama, was tasked with installing the deity of Lord Mahadeva in Rameswaram. On his journey, he placed one part of the deity in Cheruthazham, Kerala, before proceeding to Rameswaram, where he arrived late. As a result, Lord Sri Rama installed a clay deity of Lord Mahadeva in Dhanushkodi with the remaining life force. Due to its sacred significance and blessings, this land became revered by gods and saints.
In Kali Yuga, six Brahmin families constructed the main sanctum of Lord Mahadeva in Cheruthazham, where the deity is worshipped in three forms: Lord Dakshina Murthi in the morning, Lord Kiratha Murthi at noon, and Lord Uma Maheswar in the evening. Over time, neglect and foreign invasions led to significant damage to the temple. In the 1980s, temple trustees and local devotees initiated restoration efforts.
In 2011, an astrological assessment at the temple from March 7 to March 13 revealed necessary remedial actions. Subsequently, a well-organised committee was formed to restore the temple's ancient grandeur. Renovation efforts focused on the main sanctum, the Namaskara Mandapam, the four-sided building around the sanctum (nalambalam), the temples dedicated to Lord Vigneshwara and Lord Subrahmanya, and the Saraswathi Mandapa.