History of the Temple
There are six stone inscriptions in this temple dating back to the periods of Chola Kings Kulothungan, Rajathirajan and King Saraboji of Tanjure.
The historical names of this place are Lakshmi Puri, Indirapuri and Skandapuri.
There are few reasons why this place gets the name Sembanarkoil.
One is that Chola kings built and renovated this temple hence it gets the name “Sembian Palli” (“Sembian” is another name for Cholas and “Palli” means village).
Another reason is that the roof of Lord Shiva’s sanctum tower was earlier believed to have been made using many gold (“Sempon” in Tamil) sheets.
Another reason is that the Swayambu lingam of this temple once sparkled like gold. For this reason, the lord is also praised as “Sri Semponpalliyar”.
Usually, the village around the temple does not have a separate name and is referred to by the name of the temple itself. Following this norm, the village here is called Sembanar Koil. 
Legend
The legend of this temple revolves around Dakshan, also known as “Dakshaprajapathi”, the son of Lord Brahma. His daughter Dhaakshayani was married to Lord Shiva. In spite of this, he intentionally failed to invite Lord Shiva for a grand Yagna that he performed in Thiru Pariyal Veerattam, a nearby place. Goddess Dhaakshayani decided to visit the Yagna against the wishes of her husband. Instead of participating the yagna, she intent to go there and ask her father to correct his mistake. But clouded by arrogance and pride, Dakshan not only humiliated her, he also disrespected Lord Shiva. Furious Dhaakshayani cursed her father that his Yagna would not be successful. She came back to Lord Shiva and requested him to disrupt the Yagna.
It is believed that in Sembanarkoil Lord Shiva created Veerabadrar and Badrakali and sent them to Thiru Pariyal Veerattam to destroy Dakshan and the yagna. It is believed that Veerabadrar punished the guests which included Vishnu, Brahma, Indiran, Suryan and Chandran. He beheaded Dakshan and put his head in the fire. Dakshan pleaded to Lord Shiva for his life. Thereafter Lord Shiva appeared at the yagna and pardoned the guests. He also pardoned Dakshan and saved his life by placing a goat’s head in place of his original head. The idol of Veerabadrar along with Dakshan can be seen here in the corridor.
Dhaakshayani sought relief from the sin of having been born as the daughter of someone who opposed Lord Shiva. She decided to perform penance in this place by sitting in a place surrounded by fire (“Panchakni”). Pleased with her penance, Lord Shiva appeared before her and blessed her with the name, “Sugantha Kunthalambikai” and took her to Mount Kailash.
Other Legends
It is believed that Goddess Mahalakshmi performed penance here to marry Lord Mahavishnu. Lord Shiva of this temple bestowed his blessing on her. Hence, this place also gets the name Lakshmipuri.
This place is also called Indirapuri because Lord Indiran worshipped Lord Shiva here to get the weapon “Vajrayutham” which he needed to destroy demon Vruddhasuran.
The third name of this place is Skandapuri as Lord Murugan (also known as Skanda) worshipped Lord Shiva here to seek his blessings to destroy demon Tharakasuran.
It is believed that Lord Mahavishnu, Lord Brahma, Veerabadrar, Indran, Sage Agasthiar, Sage Vasishtar, Kaveri, Nagakanyas, Kuberan and Ashtadikbalakars have worshipped Lord Shiva in this place. Rathi Devi is also believed to have prayed to the lord here to get back her husband, Manmathan.
Deities in the temple
Other than the shrines of Lord Shiva and Goddess Parvathy, shrines and idols of Prakasa Vinayakar, Murugan with his consorts, Natarajar, Somaskandar, Chandrasekar, Surya Maha Ganapathy, Surya Lingam, Chandra Lingam, Nalvar, Srinivasa Perumal, Suryan, Sapthamathas, Yoga Sastha, Pitchandavar, Kasi Viswanathar, Balasubramaniar, Katchinathar, Vanadurgai, Gajalakshmi, Jeshtadevi, Veerabadrar, Navagraham, Suryan, Sornakala Bairavar, Kshetrakala Bairavar and Chandikeswarar can be seen in the corridor.
In the “koshtam” (place surrounding the sanctum sanctorum), idols of Indira Ganapathy, Dakshinamurthy, Arthanareeswarar and Durgai can be seen.
There are idols for King Kulothunga Cholan and his minister in the corridor.
Salient Features
In this temple, the Shivalingam is placed on a lotus-shaped base (avudayar) with two rows of 16 petals each.
There are beautiful reliefs on the walls - like Lord Pitchandavar, and various kings, queens and saints.
It is believed that King Kochengat Chola built about 70 “Madakkoils”. The distinguishing feature of a Madakkoil is that it is not easily approachable by an elephant. He built these temples at an elevation and there are a few steps that need to be climbed before seeing the lord. Also, the sanctum sanctorum’s (Karpagragam) entrance is narrow such that no elephant can enter it.
It is believed that Lord Suryan (Sun) worships Lord Shiva of this temple by directing his rays on the lingam every year for 12 days from 7th to 18th of the Tamil month Chithirai (April-May) in the morning hours.
An interesting aspect in this temple is that women, after purchasing new jewels and ornaments, first offer them to Goddess Sugantha Kunthalaambikai before wearing it themselves. They believe that doing so will help them buy more gold in the future.
Greatness of this temple
Devotees believe that taking a holy dip on new moon day in the Tamil months of Chithirai (April-May) and Vaikasi (May-June) will help them seek absolution for their sins.
It is also believed that worshiping the Sapthamathas here will remove obstacles from marriage proposals.