In Tretayugam, there lived a sage by the name of Yadarishi, son of the great sage Rishyasrunga and Santa Devi who did penance inside a cave with the blessings of Anjaneya (Hanuman) on this hill between Bhongir (Bhuvanagiri) and Raigiri (Now in Nalgonda district of Telangana, India). Pleased with his deep devotion, Lord Narasimha, an incarnation of Lord Vishnu appeared before him in five different forms as Sri JwalaNarasimha ,Sri Yogananda, SriGandabherunda, Sri Ugra and Sri Lakshminarasimha. All these five forms (roopas) are presently worshipped within the temple. They later manifested themselves into finely sculpted forms that later came to be worshiped as Pancha Narasimha Kshetram.
There are Purana and traditional accounts of this Shrine, which are widely popular among the devotees. There is mention about the origin of this temple in the Skanda Purana, one of the famous 18 puranas.
Glowing bright atop the sikharam of garbha griha (Sanctum Sanctorum) of this cave temple is the golden Sudarshana Chakra (about 3 ft x 3ft) of Lord Vishnu (whose reincarnation is Lord Narasimha), the adornment as well as the weapon is a symbol this temple is identified by from as far away as 6 km. It is said that many years ago the chakra moved in the direction from which the devotees came as if like a compass guiding them towards the temple.The Chakra Considered to posses mystic power and value, at times turns on its own ; no human hand is capable of turning it.
Another Legend also has it that Sriman Narayana, pleased with Yada's penance, sent Sri Anjaneya to direct the rishi to a holy spot, where the Lord appeared to him in the form of Sri LakshmiNarasimha. This spot is marked by a temple located at the foot of the Yadagiri hillock, and is located about 5 km from the present temple. There the sage worshiped the Lord for many years.
After Yadarishi attained moksha, a number of tribals, hearing of the Lord's presence, came to worship Him at this temple. But, not being very learned, these devotees began to engage in improper worship. Because of this, Sri LakshmiNarasimha moved into to the hills. The tribals searched for many years to find their Lord, to no avail.
After many years had passed, the Lord appeared in the dream of a devout lady among the tribe, directing her to a large cavern wherein He revealed Himself to all as five majestic Avatars.
The Aradhanam and Puja in this temple are performed according to Pancharatra Agamam. The puja vidhanam (Puja procedure) was set by Late Sri Vangeepuram Narasimhacharyulu who composed Yadagiri Suprabhatam, Prapatti, Stotram, Mangalashasanam and served as Sthanacharya of this temple.
There is a ancient Inscription at kolanupaka Jagaddevuni Narayana Swamy Temple saying that After christ inthe yaer of 1148 The King Tribhuvana Malludu win the bottle in Telangana He Established a fort on Ekashila Hillock at Bhongir in respect of for his Victory in Telangana . At the same time he visited lord Lakshmi Narasimha swamy several Times .
In 15th Century the Vijayanagara Samrjya Samrat Sri Krishnadevarayalu wroted in his autobiography that while he going to war he Visited the temple and prayers the lord for victory .and also he got a son on the mercy of Lord Nrusimha Swamy.