Jambay Lhakhang is said to be one of the 108 temples built by the Tibetan King Songtsen Goenpo in 659 AD on a single day to pin down an ogress to earth forever. A supine demoness was causing obstruction to the spread of Buddhism, and the temples were constructed on her body parts that spread across Tibet, Bhutan and the borderlands.

The best known of these temples are Kichu in Paro, Jambay Lhakhang in Bumthang and Jokhang in Lhasa, Tibet. Other lesser known temples in Bhutan have been destroyed. The temple of Jambay Lhakhang was later visited by Guru Rinpoche and later restored by Sendhu Raja after Guru restored his life force. Jambay Lhakhang has been repaired and rebuilt several times over time. During the 8th century, Sendhu Raja who was the king of Bumthang fell ill, and he invited Guru Rinpoche who brought Buddhism to Bhutan to cure him. Guru Rinpoche found out that the King’s illness was caused by the local deities including the powerful Shelging Karpo.

Finding the cause of the illness, Guru chased the deities into a cave, and Guru meditated inside the cave for three months. Guru then subdued the deities including the powerful Shelging Karpo and left his body imprint inside the cave, thus giving the name Kurjey (Body Imprint). Beside the Monastery is a tall cypress tree that is believed to have sprouted from the walking stick of Guru Rinpoche.