Kottiyoor temple, situated on sahyaadri mountains, also known 'Dekshina Kaasi’ belived to be the place where 'Daksha yaaga' conducted. Daksha was one of the Prajapathi, son of Brahma Deva. Sati Devi, the youngest daughter of Daksha was in deep love with Lord Siva and she married Siva without Daksha’s wish and permission.
Once Daksha held a huge yaaga and he did not invite his daughter Sathi and son in low Loard Siva. Sathi went to attend yaaga inspite of warning from Lord Siva. When Devi Sathi reach 'yaagasala' (yaaga premises) Daksha started to insult her. The shameless insult and humiliation became too unbearable for Sathi and she immolated herself in the 'yaagagni' (yaaga fire) Hearing this tragic incident, Loard Siva infuriated and beat his matted hair on the ground. From that impact two deities called Veerabadra and Badrakali emerged. Lord Siva ordered them to kill Daksha and destroy the yaaga. Veerabadra and Badrakaali reach 'yaagasaala' and they disrupted and destroyed yaga surroundings. Veerabdra killed Daksha.
Loard Brahma and Loard Vishnu approached Loard Siva and prayed to shed his anger. Siva became calm and agreed to restore Daksha’s life for yaaga completion. As his head could not be traced, head of a lamb was fixed on Daksha’s body and he was revived. By the grace of Loard Siva Daksha completed his yaaga.
The site of this yaaga was subsequently covered with dense forest. Centuries later hill tribes called Kurichyas were hunting deer in this forest area and he was sharpening his arrow on a stone, suddenly blood oozed out. This strange phenomenon confused the hill tribes and they reported this incident to nearby Padingitta Namboothiri’s illam. The Namboothiri well-versed in tantric lore got an intuition that an idol is lying at a particular spot. Namboothiri told Kurichyas to inform four prominent Nair families in Manathana village. Kurichyas reach Manathana and informed Kulangarayath, Aakkal, Karimbanakkal chathoth and Thittayil families.
All four members of Nair family and Padingitta Namboothiri were went to the spot where the incident happen. Great surprise they found a bleeding stone in the forest. Ablutions with water, ghee and milk could not control the blood flow and finally tender coconut water stopped the blood.
On consultation with astrologer they come to know that it is a holy land where Daksha conducted his yaaga and bleeding stone was a ‘swayambu idol’. It is belived that Lord Siva took form of ‘swayambu ’ next to where Devi Sathi immolated herself in the 'yaagagni'.
The place where swayambu idol was found is known as ‘Akkare Kottyoor’. "Akkare Kottiyoor" is opened only during the Vyskha Mahotsavam. ‘Ikkare Kottiyoor’ is nalukettu temple complex where regular poojas happening. Regular poojas and other rituals were to be conducted and it is believed that Sri Shankaracharya who set out present day rituals with his spiritual vision.