The Stupa of Boudanath is located 5 km east of Kathmandu city center. The Stupa stands over three-tiered platform raised over the crossed rectangles in order to bring out the yantra form and is termed as the biggest Stupa in Nepal.
The claims made in various religious and literary texts regarding the erection of the stupa is varied and conflicting. However, the Stupa is believed to have been built in the 5th century AD during the reign of the Lichchavi Kings.
As in other stupa architecture, this stupa also has Vairchana at the center followed by Achhyobhya, Ratna Sambhava, Amitabh and Amoghsiddhi in east, south, west and north directions respectively. Similarly, there are one hundred and eight small niches around the stupa accommodating the icons of Buddhas, Bodhisatavas and other female deities along with conjoint figures in erotic poses. Likewise, at the bottom level, it is surrounded with the praying wheels embossed with the famous mantra Om Mani Padme Hum fixed in more  than hundred and forty niches.
According to a very popular legend, in ancient time there was a poor girl in a Magat village of Nepal. She was called Jyajima and was very pious and charitable by nature. She had a deep desire to spread the faith of the Master and approached the King for a piece of land where she could build a stupa. Hence she built the stupa with the help of her four sons as it stands today.
According to another very popular legend, in the ancient days Kathmandu valley was under severe drought and this causes the King Dharma Dev much concern and anxiety. Finally, the King was advised by an astrologer that only the sacrifice of an ideal man with 32 virtues in front of the dry royal water spout could bring the rainfall in the country. There were hardly anybody with such a great virtue except the King himself. So the following night he commanded his son to go to the dry water spout near the royal palace (Mandev-the Lichchavi King) obeyed his father and to his great horror found that it was none other than his own father that he beheaded.
In order to atone for the heinous sin, he prayed to goddesses Vajrayogini who ordered him to erect a stupa and practice rigorous penance. He practiced great penance in Gumvihar where Vajrayogini rests and it was due to his great devotion there sprang out the present stupa of Boudanath.
Old field an Orientalist has written that a Lama form Tibet had died on his pilgrimage to Nepal and the stupa was erected with his relics and named it as Khasa Chaitya after his name.
During Buddha Jayanti (birthday of Lord Buddha, April-May) on the full moon day a religious procession takes place with the icons of Buddha on a chariot. During Lhosar festival (Jan-Feb) the pilgrims worship the Buddhist deities, light the increase and butter lamp day and night. On the full moon day of Nanai Purnima (sacred thread festival, Aug-Sept0 the stupa is decorated with prayer flags and lights. Every twelve year a special ceremony is also observed denoting the fact that it took 12 years to built the stupa. Some Buddhist texts also mentions that it took 2555 days (7 years) to complete the construction of the stupa. Dance, musical instruments, chant and hymns are performed to mark the event with great festivity. The stupa along with the monasteries are centers of learning, cultural activities, prayers and meditation.