Once the famous saint Agastiyar came to this place for meditation but was not able to find water. He prayed to Lord Murugan to help him. Soon Lord Murugan appeared before him and thrust His lance (Vel) in the sand. Soon water spring came from the spot. That place is called "Utrukuli." Later only it came to be called Uttukuli.

No one knows when the temple was build here, just they have the history. But only 200 years before some rural kings build the temple and five years before with the help of some donors the temple was rebuild and now it is the important spiritual place in Erode, Coimbatore Districts. Daily more than 200 people visit Uttukuli Murugan Temple and on special occasions like Thaipoosam more than 100,000 devotees come.

The temple dates back to 9th Century. The origin of the temple is rooted in legendary antiquity. As Muruga himself adored Lord Siva, the latter assumed the appelation "Thirumuruganathaswamy" which means "Master of Muruga". Soorapadma, the scourge of the gods with his retinue of demons, struck terror in the celestial world with his sudden depredations and campaigns. The persecuted gods approached Lord Siva and implored him to save their lives.

This temple was built by 'Sundara Pandiya' in the 15th century. The Sthalapuranam states that two boys were taking bath in a tank when a crocodile swallowed one. Three years later a 'Thread ceremony' was performed to the boy who survived. Though their family was happy on the occassion, there was grief in the family of the boy who was swallowed by the crocodile. On his way to meet 'Cheramaan Peruman', Sundaramoorthy Nayanar happened to pass by Avinashi and heard the tale. Moved by this, Sundaramoorthy Nayanar composed and sang for 'Lord Shiva' to resurrect the dead child. His prayers were answered and water started flowing into the empty tank and crocodile emerged from it with a grown boy of 8 years.