At the east end or Just standing opposite of the Bhimsen temple and across the square, the broad-roofed Dattatraya temple ranks among the valley’s oldest shrines, Dating back to 1427 A.D. during the reign of king Yaksha Malla, the last king to rule the valley from Bhaktapur and his son Raja Malla is the only temple in Nepal that is dedicated to the god Dattatraya. Dattatraya means the combined incarnation of the three supreme Gods of Hinduism; Brahma, Vishnu and Maheshwor (Shiva).

According to the legend, an influential and highly respected Indian “yogi” returning from his pilgrimage, died here. Nepalese have the culture of considering visitors as Gods and treating them likewise. Especially Yogis are highly respected as learned ones. So the shrine was built in his memory by the then rulers as a tribute. It is believed that like the Kasthamandap of Kathmandu, which it resembles, it was allegedly built using timber from a single tree but the front portico as probably added later. The main beauty of the temple is its unique architectural design and woodcarving artistically decorated all over the structure.

The additional attractions of the shrine are displayed at and about the front. There is a stone pillar with a Sankha (metal conch) on top, towards the right of the entrance and left pillar supporting Vishnu’s Charka (Disc).The entrance to the temple is guarded by two large stone sculptures of wrestlers Jaya Malla and Patha Malla as in the Nyatapola temple.  A beautiful gold gilded metal statue of Garuda– the vehicle of lord Vishnu is positioned at the front of the temple on top of another stone column. One might be interested in the wood carved erotic panels around the temple, which is still used for sheltering yogis and pilgrims. The temple is frequently by Hindus and Newars and musicians gather her to play their instruments during the evening.