Nag Panchami, GudiPadava, Teej, all Mondays of the Hindu month Shravan, Mahashivaratri, SamotiAmavas are some of the prominent festivals celebrated here. During this the gold swing at Rajwada, the temple of Goddess VindhyavasiniBhavani (one of the 24 Shaktipeeths) are visited. Every year on the immediately preceding Sunday of Makar Sankranti (i.e. the Sunday just before the date when the Sun is about to enter the sign of Capricorn as per Indian Astrological / Sidereal calendar), SwadhyayaBhavan Ashram (based at Mahalaxmi Nagar, Maheshwar) organizes MahamrityunjayaRathYatra in the town. This MahamrityunjayaRathYatra was initiated by Shri HarvilasAsopa for the welfare of humanity, and is known to be the first of its kind in the world. The yatra intends to invoke blessings of AyurvedMurtiBhagwaan Sadashiv Mahamrityunjaya (who is regarded as the prime health benefactor), and it starts from SwaadhyaayaBhawan Ashram and culminates at the banks of the holy river Narmada.
Where the city lies today, was once the ancient capital of SomvanshyaShastrarjun Kshatriya of the King KartaviryaArjuna. Maheshwar was then known as Mahissati or Mahishamati and was capital of Avanti, that lay on the banks of river Narmada and was capital of King Sahasrarjun. The King who was known to have 1000 arms and 500 wives, once stopped the flow of the Narmada river for some time, that his wives could play and enjoy themselves in that dry area. King Ravana flying overhead in his Pushpak Vimana seeing the dry river bed thought it fit to sit down and pray to Lord Shiva with a shivalinga made out of sand. While he was doing that king Sahasrarjun seeing that his wives had finished enjoying themselves, allowed the river Narmada to flow again. Ravana was disturbed and troubled by the loss of his Linga that got washed away. Furious, he challenged Sahasrarjun, who accepted and instead pinned down Ravana with his 1000 arms and tying him up, put 10 lamps on his heads and one on the tied hands and kept him like that in a humiliated state till he could be rescued.
In Mahabharata there is a mention of the unusual custom of non-prevalence of marriages in Mahishamati that goes like this. Mahishamati was ruled by King Nila who had a beautiful daughter. Lord Agni (God of fire) fell in love with her and she also responded. They had secret meetings, he in the form of a Brahmana or palace priest who performed sacred rites. Whenever the girl stayed close to the sacred fire the blaze would be high, whereas if not, then the sacred fire hardly burnt strongly. This affair continued till one day the king found out and ordered that the Brahmin be punished as per law. Lord Agni flared up in his true flaming form that terrified the King Nila. Story goes that the girls from Mahishmati from then on became unacceptable to people as wives after what had been witnessed and in turn God Agni granted the women of the place that they need not be tied down to any particular husband. This is what is supposed to have been continued till this day in the town since then.