As per Hindu legend, when the celestial deities Devas and demons Asuras were churning the Ocean of Milk for ambrosia, poison emerged first.
Shiva consumed the poison, but his wife Parvati held his throat as he was consuming it. It is believed that Shiva got the name Neelakanta from then on.
Parvati anointed Shiva with oil in this place to relieve Neelankata of his pain. The practise of anointing the lingam in the temple continues in modern times where the whole oil is consumed by the image.
The lingam in the front hall of the central shrine is believed to have been worshipped by Brahma, the Hindu god of creation, to relieve him of the sins committed while coalescing with celestial dancer Urvasi.
Markendeya is believed to have worshipped the deity by carrying him in palanquin to attain long life.
The Saptastanam festival is celebrated commemorating the event when the festival images of the seven neighbouring temples are brought to this temple.
During the festival, the festive images of all the temples are carried around the streets of Tiruneelakudi.
Kamadenu, the holy cow that emerged from churning the Ocean of Milk, is believed to have worshipped Neelakantar in this place to relieve itself of its curse from her master sage Vashista.
Sage Durvasa, Devas and other sages have worshipped the presiding deity here. The temple is counted as one of the temples built on the banks of River Kaveri.
The image of lingam is about 2 ft (0.61 m) high and has an unusual square projections and a rough surface. The ablution performed during the Chittirai festival with gingely oil is absorbed by the image.
The Saiva saint Appar is believed to have worshipped and sung praises of the deity here while he was going to Thyagarajaswamy Temple, Tiruvarur. He describes the tortures he faced from his Jain counterparts.