Legend has it that when Subramanya killed the demon Tarakasura, the Shivalingam in his throat broke and fell in five different spots, which became the Pancharama kshetras. The foremost of these is Amareswara at Amaravati where Indra and the Devas are believed to have worshipped Shiva. The others are Draksharama, Kumararama at Kotipalli, Bheemarama at Samalkota and Ksheerarama at Palakollu. Some beliefs refer to Amararama, Draksharama, Somarama at Bhimavaram, Kumararama Bhimeshwara at Samalkota and Ksheerarama at Palakollu as the five Pancharama Kshetras, while some even refer to the Chalukya Bhimeswara temple at Bhimavaram as Bhimarama.

It is believed that the Shivalingam that shattered into five pieces was a huge one, and the biggest of the five pieces is a fifteen foot long column of white marble which is worshipped as Amareswara at the Amaravati temple (this is very similar to the ten feet high Shivalingam at the Draksharama temple).

Yet another legend links the pancharama kshetras. The five Shivalingams worshipped at these shrines are said to be a part of a single Shivalingam said to have been created by Surya or the Sun God. This original Shivalingam is said to have been held in worship by the seven rishis - Kasyapa, Atri, Gowtama, Kousika, Bharadwaja, Vasishta and Jamadagni. These rishis are believed to be present in the seven tributaries of Godavari, of which the Bharadwaja, Kousika and Jamadagni Godavaris are not in existence anymore. It is believed that the seven rishis brought water into the Godavari river from their points of origin. It is also believed that the waters from the seven tributaries constitute the water sources in the temple tank.