According to the Puranas once a fierce battle broke out between Lord Shiva and the demon Jallundhara. They both appeared equally matched with no one ready to lose, and hence the battle continued for a long time. In fact it was not like an ordinary battle between the gods and the demons, but it was a match between the chastities of two chaste women Parvati and Vrinda.

Lord Shiva knew it well, that unless the chastity of Vrinda, the wife of Jallundhara, was spoiled, Jallundhara could not be killed. But it was against the nature of gods, they could not spoil the chastity of a chaste woman, Hence despite knowing everything, the gods were helpless, but for Jallundhara, nothing was a taboo.

So thinking, that spoiling the chastity of Parvati, he could defeat Lord Shiva, Jallundhara reached Parvati in the guise of Lord Shiva. But Parvati, who is herself the supreme ruler of illusion (MAYA) knew by her virtues the craftiness of Jallundhara. She at once ended his guise and signalled Lord Krishna (Vishnu) that it was now just to spoil the chastity of Jallundhara's wife, Vrinda, and it will not be a sin.

So, Lord Krishna approached Vrinda in the guise of Jallundhana. Vrinda could not understand the craftiness, and because of intimate presence her chastity got spoiled. Later on when Vrinda came to know the reality, she got infuriated and cursed Lord Krishna - O Lord, despite being a learned God you have behaved like stupids. So go and turn into shapeless black stone.

Thus by the curse of a chaste woman Lord Krishna turned into a blackstone. But later on Vrinda felt guilty that at the surge of excitement she had cursed none other than her own tutelary deity. Thus begging pardon of God, she sought a boon that from that moment onward, God will be worshipped in the same stone form. Saying Tathastu, God accepted her curse and turned into a black stone, and came to be known as Shaligrama.

Lord Shiva further declares that, "My devotees who offer obeisances to the shaligrama-shila even negligently become fearless. Those who adore me while making a distinction between myself (Shiva) and Lord Hari will become free from this offence by offering obeisances to shaligrama-shila. Those who think themselves as my devotees, but who are proud and do not offer obeisances to my Lord Vasudeva, are actually sinful and not my devotees. O my son, I always reside in the shaligrama-shila. Being pleased with my devotion the Lord has given me a residence in His personal abode.

The Padma Purana says giving a shaligrama-shila, is the best form of charity, being equal to the result of donating the entire earth together with its forests, mountains, and all. The Garuda Purana describes the glories of keeping a shaligrama-shila with the auspicious mark of a chakra in one's house.