Bouddhanath Stupa lies about 6 km to the east of the city center and is one of the largest stupa in South Asia. It looms 36 meters high and presents as one of the most fascinating specimens of stupa design, which was renovated by Licchavi rulers in the eighth century.

The stupa is also known as Khasti and the mandala design on it's base is a copy of the one in Gyangtse in Tibet. There are more than 45 Buddhist monasteries in the area, which has become one of the major tourist attraction of Nepal. This hemi-spherical dome that symbolizes the emptiness is remarked as one of the ten world heritage site in Nepal by the UNESCO.

There are many legands about the establishment of the stupa. According to one of the legend it says, during the rulling of king Vrishadev there was a severe draught in his land. He got very conscious about this problem and consulted his astrologers for the solution, who advised him to find a man with 32 auspicious marks and sacrifice him to propitiate the gods of the rain.

The king then summoned his son, Mandev, to wake up early before the dawn and sever the head of the person, whom he would find sleeping at a certain place. Mandev did exactly what his father was asking him for and as soon as he was done with that, the rain-fall started. So he got excited to tell this good news to his father, but he was horrified to discover that he had slained his own father. After then, in his misery, the prince started praying infront of the goddess "Bajrayogini". The goddess got present and by releasing a bird, she commanded him to build a stupa at the spot where the bird lands. This is how this great stupa was established.