The Bhadrachalam Sri Rama temple, being the abode of Lord Rama is situated in Khamman district on the bank of the holy river Godavari at a distance of 325 kms from Hyderabad.

Lord Rama is said to have crossed the river Godavari on his way to Sri Lanka to rescue Sita, at the spot where the Bhadrachalam temple stands, on the northern bank of the river. It is also believed that Rama, Sita and Lakshmana stayed at Parnashala about 35 km from Bhadrachalam.

The name Bhadrachalam is derived from Bhadragiri meaning the mountain of Bhadra who was the boon child of Meru and Menaka. To get the grace of Lord Rama, the saint Bhadra performed penance at the bank of river Godavari in Dandakaranya.

The saint wanted Rama to be seated on his head, but Rama who was in search of his consort Sita gave promise to his Bhakta that his desire would be fulfilled on his way back, after finding Sita and accomplishing the process of punishing the wicked Ravana. But Rama could not accomplish the promise in Ramavatara, so the sage continued the frightened penance. Then Sri Mahavishnu manifests himself as Vykunta Rama with Shankh on the right hand and Chakra on the left hand and rushes to his devotee Bhadra along with Sita and Laxman.

The hill place where the Deities were seated on was the head place of Bhadra Achala. So this shrine was called the Bhadrachalam.

In 17th century, Pokala Dhammakka who was an ardent devotee of Rama found the idols of Vykunta Rama, Laxmana and Sita. She had a dream in which Lord Rama asks her to trace his idol in Bhadragiri, perform pooja and attain salvation. She finds the idols in an anthill and pours hundreds of pots of Godavari water which shows the hidden deities. She constructed a mandapam with the help of local villagers.

In the second half of 17th century, Kancharla Gopanna who was the Tasildar of Bhadrachalam builds this temple utilizing the money from the government treasury. When he was imprisoned for his fault by the Sultan of Golconda, Lord Rama is believed to have miraculously given the Sultan the money spent by Gopanna. Later, Gopanna was released. He then became Bhadrachala Ramadasa and composed several songs in praise of Rama in Telugu.

Influenced by the majesty of Lord Rama, Golconda Ruler Tanishah earmarked the income derived from the said Palwoncha paragana for the maintenance of the temple. Tumu Narsimha Dasa, Tahasildar of Palwoncha paragana, took over charge of Bhadrachalarama temple after Ramadas had the inscription of the performance of Nitya Poojas and sevas right from early morning "Suprabhata Seva" till night "Pavalimpu Seva" before closure of the temple as "Silaasaasanaalu" on the two pillars.

The popular saint Kabirdas, who was a Muslim by birth, is also closely associated with this temple. It is also believed that when Kabir was refused entry into the temple, the images of the deities miraculously disappeared and they reappeared miraculously later when he was permitted to enter the temple.