Manikaran, meaning jewel from the ear in Sanskrit, is revered by both Hindus and Sikhs. The town is spilt into two by the roaring Parvati river. According to legend, a giant snake took the ear-rings, or 'manikarna', of Parvati, consort of Lord Shiva, while she was bathing and then snorted them through its nose to create spaces where hot springs spewed forth. These sulphur springs are famous for their curative powers and are hot enough to boil rice.

The Nanak Devji Gurudwara, a shrine of the Sikhs, has bathing kunds with curative properties. The langar, or community meal, is also prepared in the hot spring.

The beautiful Manikaran Temple, located at an altitude of 1737 meters in the valley of river Parvati, is a sacred shrine of the Hindus.