It is believed that Adi Shankaracharya had a vision of Sri Mookambika Devi and installed the deity here. One day Devi appeared before Adi Shankaracharya asking for his wish. He revealed his wish to install the Devi idol in a place in Kerala to worship. Devi agreed but put forward a condition that she will follow Shankara and he should not look back till he reaches his destination. But to test Shankara, Devi deliberately stopped the noise of her anklets when they reached Kollur whereupon Shankara turned and looked back because of doubt. Devi then asked Shankara to install her vigraha at that very location at Kollur. The original temple where Shankara meditated and Devi appeared before him is at Kodachadri peak (1343 mt) which is at a distance of about 21 kms from Kollur, also visible as a large mountain peak from Kollur Shri Mookambika Devi Temple.