The monastery was established in the year 1250 during the rule of Tzar Michail Assen. It was destroyed with the fall of the Bulgarian state under Ottoman rule. In 1809, a monk from the town of Troyan, Isay, came as a hermit to this place. One day he heard the story of a herdswoman who saw a mother and a child sitting over a stone and crying for being left forgotten and homeless. The monk interpreted the story as the request of Gods Mother to have a monastery rebuilt in this place. Isay built a small cottage close to the stone and started living here as a hermit. He was telling the story of the herdswoman to the local people, trying to raise money for a new monastery.
In 1831 during a plague epidemic, many citizens of Sevlievo left their homes and fled to the Balkan mountain. The people then took a vow to build a monastery in the place of the old Batoshevo monastery if they survive the epidemic. It took four years to start construction in 1836 with donations from Gabrovo tradesmen, Sevlievo craftsmen and other rich Bulgarians. The first father superior of the new monastery is Hadzhi Makarii from the town of Troyan. The monastery became quickly a renowned religious school and even the famous Bacho Kiro Petrov spent two years in studies here.
During the Turkish domination famous revolutionaries such as Mitkaloto, Angel Kunchev, Peshev, Karagyozov came often to the monastery and organized secret meetings behind its walls. During the April Uprising in 1876, the monastery was set on fire by Turkish troops, but thanks to a sudden rain, the church was saved from the fire.
The monastery was again rebuilt though the new residential part has 2 floors in contrast to the earlier three.