The Prambanan temple is the largest Hindu temple of ancient Java, and the first building was completed in the mid-9th century. It was likely started by Rakai Pikatan as the Hindu Sanjaya Dynasty’s answer to the Buddhist Sailendra Dynasty’s Borobudur and Sewu temples nearby. Historians suggest that the construction of Prambanan probably was meant to mark the return of the Hindu Sanjaya Dynasty to power in Central Java after almost a century of Buddhist Sailendra Dynasty domination. The construction of this massive Hindu temple signifies that the Medang court had shifted its patronage from Mahayana Buddhism to Shivaist Hinduism.

A temple was first built at the site around 850 CE by Rakai Pikatan and expanded extensively by King Lokapala and Balitung Maha Sambu the Sanjaya king of the Mataram Kingdom. According to the Shivagrha inscription of 856 CE, the temple was built to honor Lord Shiva, and its original name was Shiva-grha (the House of Shiva) or Shiva-laya (the Realm of Shiva). According to the Shivagrha inscription, a public water project to change the course of a river near Shivagrha Temple was undertaken during the construction of the temple. The river, identified as the Opak River, now runs north to south on the western side of the Prambanan temple compound. Historians suggest that originally the river was curved further to east and was deemed too near to the main temple. The project was done by cutting the river along a north to south axis along the outer wall of the Shivagrha Temple compound. The former river course was filled in and made level to create a wider space for the temple expansion, the space for rows of pervara (complementary) temples.

Some archaeologists propose that the statue of Shiva in the garbhagriha (central chamber) of the main temple was modelled after King Balitung, serving as a depiction of his deified self after death.