According to Hindu mythology, Varanasi was founded by Shiva,one of three principal deities along with Brahma and Vishnu. During a fight between Brahma and Shiva, one of Brahma's five heads was torn off by Shiva. As was the custom, the victor carried the slain adversary's head in his hand and let it hang down from his hand as an act of ignominy, and a sign of his own bravery. Shiva thus dishonored Brahma's head, and kept it with him at all times. When he came to the city of Varanasi in this state, the hanging head of Brahma dropped from Shiva's hand and disappeared in the ground at varanasi.

• Buddha is believed to have founded Buddhism here around 528 BCE when he gave his first sermon, "The Setting in Motion of the Wheel of Dharma", at nearby Sarnath.
• The city's religious importance continued to grow in the 8th century, when Adi Shankara established the worship of Shiva as an official sect of Varanasi
• Tulsidas wrote his epic poem on Rama's life called Ram Charit Manas in Varanasi. Guru Nanak visited Varanasi for Maha Shivaratri in 1507, a trip that played a large role in the founding of Sikhism
• Dying in Varanasi is considered to be the best way to attain salvation or moksha by hindus