Plans and arrangements for building the temple were taken up in the year 1915. The consecration of the temple was performed in the year 1922. The second consecration of the temple was performed in the year 1977 on 22^{nd of Thai month (January-February).}

People suffering from any disease stay in the temple for 12 days continuously and light lamp called Nanda Deepam. They squeeze the essence of leaves of the trees around the temple and apply them on their body praying to the Goddess. They firmly believe that Ambal will cure them.

Goddess Malayala Bhagavathi in Kanakkanpalayam, Erode district is the protector of Her devotees from all hardships. She is the Guardian Deity to all those who come to Her abode with trust and devotion.

Pujas to Amman are performed three times a day at 6.00 a.m., 12.00 a.m. and 6.00 p.m. Special pujas are performed on all Fridays in the month of Aadi (July-August) and on New Moon days with abhisheks and special dressings (Alankaras). Women perform special worship with 108 lamps – Tiruvilakku.

A merchant in Karnataka was once carrying bags of turmeric in a bullock cart through the hill routes. As the weight was not in correct balance, the bullocks could not go freely. To correct the balance of weight, the trader wanted to load some rocks and went into the hill. One stone was glittering. After placing that in the cart, the balance was right. He was able to drive the cart without any difficulty. When the cart reached Kanakkampalayam the stone fell down but the trader did not notice that as there was no problem in the balancing.

Sooner an anthill grew around the stone and the flies occupied the hill during the rainy season. A Valayavan – a community then living in the area – came to gather the flies for food and hit the anthill which began to bleed. The shocked valayavan informed the people there. One among the crowd was possessed and cried, "I am Malayala Bagavathy. Perform puja and worship me. I will protect you." The elders in the place immediately made a green tent – Pandal – and began pujas and worship. Later, in the year 1915, as planned, the temple came into being.

The deity is a swayambumurthy.