Chakrapani Temple is situated about 1.5 km North of Ramaswamy Temple. Here the main deity is Chakraraja. The Sudarshana Chakra is also here. The temple is also an exquisite exponent of the early temple architecture. The important and peculiar point about this temple is that Vilva (Bilwa) Archana which is normally performed in Shiva temples is also performed here for the Perumal (Lord Vishnu). As per legend, Chakra (also called Sudarshana), the discus, is the most powerful weapon of god Vishnu. He once sent his weapon to nether world to kill king Jalandasura. The weapon is believed to have come out of the nether world through river Kaveri. God Brahma, who was taking bath in the river, got impressed and installed the image of Sudarshana in the place where the temple is now located. Surya, the Sun god, who was glowing in brilliance, had his brightness diminished by the effulgent Sudarshana. Surya worshipped Sudarshana and pleased by his devotion, Sudarshana restored all the powers of Surya. Vishnu attained the name Chakrapani from then on. Surya wanted the town to be named after him and pleased by his devotion, Chakrapani named the city as Bhaskara Kshetra. It is believed that Surya worshipped Chakrathazhwar during Masi Magam and every year Masi Magam festival is celebrated during the day, commemorating the event. The temple car is drawn around the streets of the temple during the day. In 1620, when Govinda Dikshitar, divan-administrator for the Nayaks, constructed the Ramaswamy Temple, Kumbakonam, he added a commercial corridor between the new temple and the older Chakrapani temple.
As per another legend, during the great deluge, the pot of nectar came down swirling. The pot of nectar fell down into different pieces as Shiva shot his arrow at the pot. The nectar is believed to have relieved lives in the planet. As per Sarma Sastrigal, the various places where the nectar spilt are Kumbeswara Temple, Sarangapani Temple, Chakrapani Temple, Nageswaran Temple, Someswaran Temple, Abhimukeswarar Temple, Kasi Viswanathar Temple, Kumbakonam, Kambatta Viswanathar, Gauthameswarar Temple, Banapuriswarar Temple, Varaha Perumal temple, Lakshminarayana and Varadaraja.