As per Hindu mythology, Lord Muruga came to Palani when he failed in the task given by Sage Narada. He, along with his brother Ganesha, had been asked to encircle the world thrice. The person who came to the sage after accomplishing this task would be offered gnana-palam or the fruit of knowledge. Lord Ganesh circumambulated Lord Siva and Parvathi as he saw them as his world, while Lord Muruga failed in this. Lord Muruga wanted to grow out of his boyhood, and thus he reached Palani.

The idol of Lord Muruga is made up of Navapashanam or nine poisonous herbs and it was made by the great siddhaar of Hinduism, Sage Bogar between 550 to 300 BCE. The temple was constructed between the second and fifth centuries CE by the ruler of the Chera dynasty, Cheraman Perumal. The mandaps and gopurams of the temple were added by the Cholas and the Pandyas. The temple is situated on the Sivagiri Hill, the higher of the two hills in Palani. The priests who have sole  right to access the idol in the sanctum sanctorum are selected from the Gurukkal community in Palani. There is a winch-and-rope car that goes from the foothills to the top. Restrooms, benches and drinking water are available on the elephant path. Pilgrims can use the winch-and-rope car from 7.00 am to 12.30 pm and from 1.30 pm to 5 pm. On festive dates, the winch starts operating from 4.00 am.

Thai-Poosam, which falls on the full moon day of the Tamil Thai month (January-February), is the most important festival of the temple.  The other festivals in Palani are the Vaikhashi-Vishakham, Pankuni-Uththiram, and the Soora-Samharam. Devotees also bear Kavadi (an ornamental mount decorated with flowers, tinsel work, and glazed paper) on their shoulders. Tonsuring is an important tradition of the temple. The idol is also anointed with sandalwood paste, oil and milk, and this abhishekam is a common form of worship in Palani. The temple is open from 6.00 am to 8.00 pm and on festival days,  from 4.30 am.