According to folklore on his way to Tissa Wewa, once King Dutugemunu placed his sceptre which contained a sacred relic of Buddha at this place where Mirisavatiya was built. Later when he came back neither him nor his men could remove the sceptre from where it was planted. It leads the king to build Mirisavatiya enshrining the sceptre. The other significance was that it is the sceptre he carried to the battle grounds against the Tamil Chola King Elara. It is said that the whole construction of the stupa took three years, and originally it was 60 feet tall with a circumference of 560 feets.
In the earliest days Mirisavatiya was a part of Mahaviharaya and later it was developed to be a separate monastery governed by the Mahaviharaya.
Folklore also tells that once the King consumed a Chilli curry without having offered a portion to the sangha, and he wanted to apologise to the sangha hence named the stupa as Mirisavatiya which means “Chilli Pod”.
The stupa is also considered to be a memorial building built once after defeating the Tamil Chola King Elara and uniting Sri Lanka.