Kobo Daishi founded the temple after Dainichi Nyorai appeared in a purple cloud during his training, declaring 'This land is a sacred place.' He carved the deity's statue on the spot and built the temple immediately.

Dainichi-ji wurde während der Tensho-Ära von den Truppen von Chosokabe Motochika niedergebrannt und später in der frühen Edo-Zeit wieder aufgebaut.

The temple's principal image switched in the Meiji era: an Eleven-Faced Kannon from the neighboring shrine replaced the original Dainichi Nyorai statue, which was demoted to a side position after centuries as the main deity.

Dainichi-ji ist Tempel Nr. 13 auf der 88-Tempel-Pilgerroute durch Shikoku in Tokushima.