Pakhlavan Mahmoud (Pahlavon Mahmud), the Hercules of the East, Palvan Pir the kurash wrestler-saint, Pirar Vali the antireligious Persian poet, Mahmoud the district furrier, all died here, one and the same, in 1325 to enter local folklore as a hero of both brain and brawn and to become the adopted patron saint of Khiva. Over the years a small mausoleum grew up over the site of Mahmoud's original furrier shop, but it was not until 1810-1835 that the tomb was given its present glory by the Kungrad khans of Khiva, as they transformed the shrine into the last great family mausoleum erected in Central Asia and the most renowned building in the city.

Originally the mausoleum building was modest and small; but as it became a popular place of pilgrimage, khuzhras, khanaka and mosques, where pilgrims pray, were constructed. The entrance portal in the mausoleum was constructed at the building's south side in the XVIII century. The Shergazi-khan, having constructed the new madrasah, based it on the Pakhlavan Mahmud mausoleum in 1719. Muhammad Rakhim-khan I decided to change the ensemble considerably after a successful campaign in Kungrad in 1810. He reconstructed the Pakhlavan Mahmud mausoleum so, that the governing Kungrad dynasties necropolis appeared "at the feet" of the Khivan. They began to bury the Khan's family members here, and the mausoleum territory was extended to the east and to the south. The new mausoleum includes an old tomb and khanaka with a high double dome, the silhouette of which has become one of the main symbols of Khiva.