The Badulla Kataragama Devalaya is believed to have ancient origins, tracing back several centuries. Its precise founding date is not clear, but it is known to have existed for many generations, serving as a place of worship and pilgrimage. Badulla holds a significant place in Sri Lanka's history, being an ancient subkingdom of the Kandyan Kingdom and reportedly visited by Gautama Buddha himself. The origins of the Kataragama Devalaya in Badulla are shrouded in mystery, but records indicate its flourishing since the 17th century.

Legend has it that King Kumarasinhe, a prominent figure in Badulla's history, led the defense against a large Portuguese army invasion under Constantine de Saa. The decisive Battle of Randeniwela, fought in a paddy field, marked one of the Portuguese army's first and bloodiest defeats in Sri Lanka.

During the Portuguese invasion of Badulla in 1630, led by Constantine de Saa, the city, including the Kataragama Devalaya, suffered devastation. The invading forces reportedly pillaged and burned down much of the city, destroying crops and livestock to starve the populace.

The reconstruction of the Kataragama Devalaya in Badulla is credited to King Rajasinghe II of the Kandyan Kingdom (1635 – 1687), following traditional Kandyan architectural styles. The temple's architecture is noteworthy, with intricately carved timber columns supporting the roof and exquisite wood carvings adorning the Sihasana Mandapaya building, reminiscent of the craftsmanship seen in Embekke Devalaya.

The temple is dedicated to Lord Kataragama, a revered deity in Hinduism and Buddhism. Kataragama, also known as Skanda or Murugan, is associated with war, protection, and fertility. The worship of Kataragama has deep roots in Sri Lankan religious traditions, and the deity is venerated by people of various faiths.

The temple's architecture reflects a blend of traditional Sri Lankan design elements with influences from Hindu temple architecture. Intricate carvings, colorful murals, and ornate sculptures adorn the temple complex, creating a visually stunning and spiritually uplifting environment for devotees.

Today, the Kataragama Devalaya in Badulla stands as a testament to the region's rich history and cultural heritage, attracting devotees and visitors alike with its religious significance and architectural splendor.