Legend has it that the building stands on the site where the prophet Elias rested on his flight from the vengeance of Jezebel, who was seeking vengeance after Elijah slaughtered the priests of Baal (1 Kings 19:15). Another tradition holds that Greek Bishop Elias of Bethlehem was buried here in 1345, and another holds that it places the sepulcher of St. Elias, an Egyptian monk who became Patriarch of Jerusalem in 494.

Many miracles are attributed to Mar Elias. To this day, many children are dedicated to him, and he is believed to respond to the requests of barren women and ailing children. He is the Patron Saint of the drivers on the road. The Monastery is a popular site for an annual pilgrimage. On the Saint's day (August 2nd), local Christians and Muslims go to Mar Elias to visit the monastic chapel. Adjacent to the Monastery of Mar Elias, a bench bears engraved inscriptions from the bible in several languages.

Situated on the saddle of a hill halfway along the main Jerusalem-Bethlehem road, the white limestone building of Mar Elias provides a panoramic view of Bethlehem and Herod’s Fortress. The monastery was established by Patriarch Anistanius in 460 AD. It was destroyed by a huge earthquake in 1160 AD, but it was restored by the Crusaders in the same year.