Founded in the 15th century, the monastery is built in caves in the limestone walls of a spectacular valley leading to the ancient `cave city of Chufut- Kaleh.

It is said that an icon of Mary the mother of Jesus illuminated by a candle miraculously appeared high on the cliffs and was discovered by a shepherd. The local prince ordered the icon to be carefully moved to his palace, but when he awoke the next morning he found that the icon had returned to its position on the cliff.

It is likely that the site of the existing monastery had religious significance well before the 15th century, and there is evidence of monastic activity here from the 9th century AD. The valley was originally settled by the Greeks and later by the Genoese, and there are Christian graves in the area dating from the 6th century.

The monastery continued to function during the centuries of Tatar rule, and some of the Russian prisoners held in Chufut-Kaleh higher up the valley were allowed by their Tatar captors to attend services there, and to meet the Russian envoy there too on occasions.

It fared less well during the soviet period and 7 years after the 1917 revolution it was closed by the government.

An alternative, and certainly older account of the founding of a monastery here tells how a huge snake or dragon appeared in the valley, preying on both cattle and people. The Greek and Genoese inhabitants at the time were christians and prayed to the Most Holy Mother of God to free them from the monster. One night they saw a candle burning high up on the cliff. When they went to look, they found steps hewn in the rock leading to the candle, which illuminated an image of the Most Holy Mother of God, and nearby the corpse of the dragon. The people cut the corpse into pieces and burnt it, and from that day the place became a holy shrine.

Escarpments around Bakhchisarai have been eroded into fantastic shapes by centuries of wind and rain. The resulting caves became a natural refuge for both animals and humans.