As the name suggests, this ancient temple is dedicated to the cult deity, Veerabhadra, an incarnation of Lord Shiva. Many devotees visit the temple to worship the 3.6 m high monolithic idol of Uddana Veerabhadra. The deity is depicted with four arms holding an arrow, sword, bow and shield. The temple also houses a small idol of Daksha, the king of Gods. A highly revered Shiv Linga, called 'Sarvanga Linga', is also worshiped in the temple.

Located at the Matanga hilltop, the highest point in Hampi, the Veerabhadra Temple is associated with an interesting legend. People believe that Daksha had a daughter named Sati. She married Lord Shiva against the will of her father. Once Daksha insulted Sati and abused her consort Shiva. Unable to deal with the insult, Sati committed suicide by jumping into the sacrificial fire. When Lord Shiva heard the news of his consort's death, he got furious and gave birth to the fierce demon god Veerabhadra and goddess Kali from a piece of his matted hair. The ire of Lord Shiva beheaded king Daksha.

Later, when all heavenly Gods requested him to brim Daksha back to life, he replaced the head of Daksha with that of a goat. Daksha then transformed into a staunch devotee of lord Shiva.

The temple does not have much architectural beauty to appreciate. Still it is highly frequented for its religious value. The doors of the temple are painted in the typical saffron colour.