This is a very ancient sacred place (piligrim centre). Lord Narasimha manifested Himself here as a huge of rock in "Yoga Mudra" (In an entwined contempalative posture) and hance it acquired the name of "PENUSILA" (Huge rock) and in course of time became famouse as "PENCHALAKONA" Legend has it that after slaying the demon Hiranya Kasipa.Lord Narsimha bathed in Penchalakona and withdrew that "Avatara" (Incarnation) of Narasimha, Shedding his anger and ferocity.
The Lord here goes by the name of Somasila Narasimhaswamy and has became one of the Nava Narasimhas (Nine manifestations). People believe that because the sage Kanva resided in the area in the past, the river flowing here aquired the name Nadi and thet with efflux of time it became Kandaleru. It is also learnt that the temple was renovated in the 10th century.
Another story says by the after killing the demon Hiranyakashyapu, Lord Vishnu was roaming around in the forest. Goddess Sreedevi (Lakshmi) appeared as a Chenchu trible lady and after calming his anger, she hugged him as they say in thelugu , "Penu Vesukonuta". So this temple was named "PENUSILA".