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 fu incendiato durante l'era Tensho dalle forze di Chosokabe Motochika, poi ricostruito all'inizio del periodo Edo.

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 è il tempio numero 13 degli 88 templi del Pellegrinaggio di Shikoku a Tokushima.