Putuo Shan and its temples are sacred to the Bodhisattva Avalokitesvara, a goddess of compassion. Legends tell that Avalokitesvara attained supreme enlightenment upon the island and that Sudhana, another Bodhisattva, came to Putuo Shan to pay homage to Avalokitesvara. Mount Putuo first became a Buddhist Sanctuary during the Tang Dynasty. Legends tell of an Indian Monk, arriving late in the 9th century, who had received instruction and a seven-hued precious stone from the Bodhisattva Avalokitesvara. In 916, the Japanese monk Huie was stranded at Mount Putuo while bringing a statue of Avalokitesvara from Mount Wutai to Japan.

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