Tanah Lot means "Land in the Sea" in the Balinese language. Located in Tabanan, about 20 kilometres (12 mi) from Denpasar, the temple sits on a large offshore rock which has been shaped continuously over the years by the ocean tide.

Tanah Lot is claimed to be the work of the 15th-century priest Nirartha. During his travels along the south coast he saw the rock-island's beautiful setting and rested there. Some fishermen saw him, and bought him gifts. Nirartha then spent the night on the little island. Later he spoke to the fishermen and told them to build a shrine on the rock for he felt it to be a holy place to worship the Balinese sea gods.

The Tanah Lot temple was built and has been a part of Balinese mythology for centuries. The temple is one of seven sea temples around the Balinese coast. Each of the sea temples were established within eyesight of the next to form a chain along the south-western coast. However, the temple had significant Hindu influence.

At the base of the rocky island, poisonous sea snakes are believed to guard the temple from evil spirits and intruders. A giant snake purportedly protects the temple, which was created from Nirartha's scarf when he established the island.