Mount Wutai, originally sacred to Daoism, became one of the earliest places in China to embrace the new Buddhist faith. According to the Avatamsaka Sutra, an Indian monk had a vision of Bodhisattva Manjushri here in the first century AD, and the mountain has been regarded ever since as the abode of Manjushri. By the Northern Wei period, the mountain's temples were important enough to be represented on a mural at Dunhuang.

Pusading Si was especially favored by emperors Kangxi and Qianlong, who stayed here when making pilgrimages to Wutai. At that time, the ancient temple was rebuilt in Imperial Qing style, allowed the favor of Imperial yellow roof tiles, and put in charge of all other temples on the mountain. Its present buildings and layout therefore date to the Qing Dynasty.