The shrine dates back 1,270 years, but the current structure was rebuilt several times due to fire and earthquakes.

Kanda Shrine was first built in the second year of the Tenpyō Era (730 AD), in the fishing village of Shibasaki, near the modern Ōtemachi district.

As Daikokuten and Ebisu both belong to the Seven Gods of Fortune (Japanese, "Shichifukujin"), Kanda Shrine is a popular place for businessmen and entrepreneurs to pray for wealth and prosperity.

After his defeat in 940 AD, he was decapitated by Fujiwara no Hidesato and his severed head was brought to the Shibasaki (Edo) area in a wooden bucket (首桶) and buried on a low hill near the shrine's location today.

Locals who respected his defiance, and fearing his curse, enshrined him in Kanda Shrine, and his spirit is said to watch over the surrounding areas.

It was rumored that when his shrine fell into disrepair, Masakado's angry spirit wrought natural disasters and plagues upon the nearby lands.

It is also said that Tokugawa Ieyasu felt uncomfortable to have his castle built close to such a powerful spirit, and so decided to move Kanda Shrine to its modern location.