According to legend, the shivling (symbolic representation of the deity) was installed here by a demon named 'Khara'. This demon (of the Khara Dhooshana demon duo) featured in the Ramayana, worshiped Shiva at Chidambaram and obtained from him three Shivalingams.
He travelled holding one shivalingam in each hand and one in his mouth. Kadichiruthy Prathishitta later become Kaduthuruthy. The remaining two shivlings were installed at the Ettumanoor Mahadeva Temple and Vaikom Mahadevar Temple. The name Kaduthuruthy, also believed to have emanated from this temple and etiology has it that Kadichu (bite) Irutthy (make some one sit).