The temple originally was a detached palace of Emperor Kameyama, which was built in the year 1264. Later he became a student of a Zen Master, Busshin Daimin Kokushi，and he dedicated the palace to Zen Buddhism in 1291.

Emperor Go-Daigo ranked Nanzen-ji and Daitoku-ji 1st among the five major temples in 1334. Other three included Tofuku-ji and Ken'nin-ji. In the year 1385 Shogun ASHIKAGA Yoshimitsu ranked Nanzen-ji above the five temples so as to place Shokoku-ji the 1st among the five temples.

Main buildings were lost by fire and rebuilt in 1393 and 1447. In the year 1467, all of the buildings were reduced to ashes by fires of war and they had to wait until 1605, when Ishin Suden became the chief priest of the temple, to be able to rebuild the buildings.