It is believed that the name of the town Kumbakonam is derived from the legend associated with Kumbeswarar Temple. "Kumbakonam", roughly translated in English as the "Jug's Corner",is believed to be an allusion to the mythical pot (kumbha) of the Hindu god Brahma that contained the seed of all living beings on earth. The kumbha is believed to have been displaced by a pralaya (dissolution of the universe) effected by Hindu god Shiva's arrow and ultimately came to rest at the spot where the town of Kumbakonam now stands. The nectar is believed to have fell in two places - the Mahamaham tank and the Potramarai tank. This event is now commemorated in the Mahamaham festival held every 12 years. Kumbakonam was also formerly known by the Tamil name of Kudamukku. Kumbakonam is also identified with the Sangam age settlement of Kudavayil.

The Mahamaham festival takes place once every twelve years during the Tamil Month of Masi (February - March), when lakhs of pilgrims from various parts of India visit Kumbakonam to take a holy bath in the sacred Mahamaham tank which is located in the heart of the town. The festival has archaeological and epigrahical evidence. Tulapurushadaram, the practise of weighing oneself against gold and donating to the temple was affected by Govinda Dikshitar and the funds were utilised for funding the construction of the 16 mandapas around the tank. Krishnadeva Raya (1509–1529 CE) is believed to have witnessed the Mahamaham festival during this time. He made donations to the temple on this occasion is found in another inscription.