Gauthameswarar Temple is situated on the western bank of the Mahamaham tank, it is a Shiva temple. The presiding deity of the temple, linga, is known as Gauthameswarar. Sage Gautama cursed Indira for his immoral approach towards his wife. Yet, the incident greatly disturbed the peace of his mind. He came to this place seeking peace and worshipped Lord Shiva. For his puja, he made Ganga spring up here. The river that came at the request of the sage was known as Gautami. In course of time, Gautami mingled with Palaru. As Gautama worshipped the Lord here, He is called Gautameswarar. His consort is known as Soundaranayaki. The structure of the temple is such that the shrine of Mother Krupambika is in the Mandap just opposite the Shrine of the Lord facilitating simultaneous darshan of both. Sage Gautama graces in a sitting form in the temple. Lord Sabeswara appears furious in a shrine. Lord Vinayaka is installed by His side to cool him down. There is a separate shrine for Lord Bhairava.

On Shivarathri day Lord graces with Mother Krupambika sitting on the Vrushab, the bull vehicle of the Lord Nandhi. This worship is considered the very blessing. The place on the northern bank of River Palaru was once dense with Karri trees. Hence, the name Karaimaraikadu which in course of time shrunk as Karai. Besides this temple, on Shivarathri day, devotees also visit simultaneously other nearby Shiva temples at Mel Visharam, Veppur, Pudupadi, Kudimanallur, Vannivedu and Avarakkarai. To facilitate darshan to the devotees, all the temples are kept open during the whole night.