Paaladhara and Panchadhara is a beautiful scene spot in surroundings of Srisailam, located about 4 Km from the main temple. According to legends, Bhagavan Adisankara performed penance at this place and composed the famous Sivanandalahari here. His Holiness Kanchi Paramacharya confirmed this and marble statues of Sarada Devi and Sankaracharya installed there and daily regular Poojas are being offered also.
This spot is located in a narrow valley approachable by a flight of steps where subterranean streams of pure water with musical sound reverberating the surroundings. According to local folk these streams are known as Phaladhara Panchadhara and these two signify their origin from the fore head of God Siva the Phaladhara (Phala = fore head, dhara = Stream) and denote the five aspects of Siva, the Panchadhara (Pancha = five, dhara = Stream).
The water from this stream flows in interrupted at all seasons. The Skanda Purana describes the flow as Bhogavathi and it joins in the river Krishna.