As per the writings on the temple wall this temple is believed to be constructed by the King Pulakesi II of Chalukya dynasty around 625 A.D to commemorate his victory over Vengi region of Andhra Desham. This can be observed from the square pillars used in the temple structure which were different from the circular pillars commonly used in temples constructed by Kakatiyas.
The Kakatiya kings of "Orugallu empire" which is the present Warangal town have adopted Goddess Bhadrakali as their "Kula Devatha" giving her preference over other gods. The lake was built later by Ganapathi Deva, a minister in Kakatiya Dynasty. A road leading to the temple was also added during that period.
Due to the fall of Kakatiya Dynasty to the Muslim ruler of Delhi Ala-ud-din Khilji, his general Malik Kafur and later to Ghias-ud-Din Tughlak, and during the rule of Bahamani Sultans and Golkonda rulers, the temple lost its prominence over the period and the place has become dilapidated.

Sri Ganapathi Sastri (a.k.a. B. S. Ganesh Rao) a Brahmin and devi upasaka (Devotee of Goddess Kali) from Karnataka has migrated to Warangal in 1940's. He noticed the old Bhadrakali temple and has taken interest in renovating the temple. He constructed a small house next to the temple and started living in this isolated place. He along with Sri Mudumbai Ramanujacharya sought the help of Sri Maganlal Sameja (a prominent local merchant) and other affluent locals and renovated the old temple in 1950. Many persons like Brahmasri Sri Hari Radhakrishnamurthy, Adluri Seetharama Shastry, Vangala Guravaiah, Thandra Venkata Rama Narsaiah, Mahatapaswini Mangalambika and Tankasala Narasimha Rao have lent their hands in the renovation work of the temple.
Before the temple was renovated in 1950 there were Animal Sacrifices at the temple (an old custom at Kali temples in India). This practice was stopped from 1950 onwards after the renovation of the temple. During the renovation, Chandi yantra was installed in the temple and amrutha beejaksharas (holy shlokas) were written on the deity's hanging tongue and modified the deity's fierce looking eyes and tongue to a pleasant looking face. Since then everyday poojas, Sharannavaratras, Vasantha navarathras are being conducted regularly as per the Vedic rites.
Sri Ganapathi Sastri, at the age of 113, died on 11 November 2011 in Warangal. He was survived by two sons and three daughters. He was the Bhadrakali's temple trustee at the time of his death. The temple and the people of Warangal has lost a great man who has developed the temple single handedly. His son Sri B. Seshagiri Rao has taken over the temple affairs as chief priest a few years ago.