The rock outcrop (inselberg) and caves in and around Dambulla were first occupied in prehistoric times. They were converted to Buddhist worship in the first century BC, and at some point the overhang was subdivided in order to partition the original space. Nissankamalla further developed the caves in the 12th century, carving and gilding numerous statues; some of these may still survive, but that is difficult to determine since they would now be obscured with much later paint. The surfaces, of statues and paintings, that can be seen today, date mostly from the Kandyan period (17th - 18th centuries) and have been subjected to continuous renewal and overpainting since then.

Dambulla is located in the Cultural Triangle, just a few miles southwest of Sigiriya.