It is located 22.5 km south-west from the town of Mandi, at an elevation of about 1,360 metres (4,460 ft) above sea level, with a shoreline of about 735 m. Rewalsar Lake is a sacred spot for Hindus, Sikhs and Buddhists,[1][2] and sacred to Tibetan Buddhists for the Vajrayana practices of Padmasambhava and Mandarava, which are credited for the lake's creation.

Known to Tibetans as Guru Rinpoche, (the "Precious Master"), Padmasambhava revealed the teachings of Vajrayana Buddhism in Tibet.

Instead of finding their corpses incensed and charred, Vihardhara finds that the fire of the pyre has been transformed into Lake Rewalsar, out of which arises a blooming lotus that supports the unharmed Mandarava and Padmasambhava who through this manifestation of their realisation have achieved their secret names of Vajravarahi and Hayagriva, respectively, after which Vihardhara furnishes the union with his unreserved blessings.

Legend has it that the great teacher Padmasambhava (Guru Rinpoche) used his enormous power to take flight to Tibet from Rewalsar.

The building's interior is filled with traditional dzong, tsa tsas, prayer flags and medicine pills made by local craftworkers.