As per Hindu legend, Shiva is believed to have killed a tiger and worn the skin of the tiger as a sign of his victory in the forest Darukavana. At a later time, during the Mahabharat times, the Pandava prince Arjuna who was in exile along with his brothers was asked by sage Dhaumya to visit the forest and seek the blessings of Shiva.
Arjuna visited the place and obtained special skills and weapons in archery from Shiva. The presiding deity is believed to have absolved the sins of various other deities namely Vishnu, Brahma, Rama, Sita, sage Vashista, Lakshmana, other celestial deities and hence got the name Papanasanathar, the one who absolves sins.
The original complex is believed to have been built by Cholas, while the present masonry structure was built by Vijayanagar kings during the 16th century. Inscriptions from the Chola and Vijayanagara Empire periods are seen in this temple.
The temple has inscriptions from the period of Kulothunga Chola I and Kulothunga Chola III speaking of gifts made to the temple during the Chola period. In the inscriptions, the presiding deity of the temple is referred as Thirupalaithurai Makarathevar. The region is a part of Nittavinoda valanattu Nallur and the inscriptions indicate the survey of land done by the kings.
The inscriptions also indicate generous contributions of land for the temple in the form of gardens and arable lands for the maintenance of the temple.In modern times, the temple is administered by the Hindu Religious and Charitable Endowments Department of the Government of Tamil Nadu.