Chhime Lhakhang lies on the periphery of the expansive valley of Lobesa where the borders of Thimphu, Punakha and Wangduephodrang districts meets. Perched on top of a little hilltop overlooking the Puna Tsang Chhu, Chhime Lhakhang is auspiciously surrounded by the nine Khas or villages namely Sosokha, Yuwakha, Gangmakha, Septokha, Sembjikha, Pachakha, Buewakha and Gangkhar.
Around the time when Drukpa Kuenley first visited Bhutan, a demon called Loro Duem resided on a high pass presently called Dochu La. She terrorised all who tried to cross the pass and the people in the valley lived in fear. Two more demonesses lived on two smaller passes, and the three of them caused people misery and suffering. When Drukpa Kuenley heard of this, he hunted down the demoness at Dochula and the three demonesses recognising Drukpa Kuenley power ran down the valley, and two demons dissolved into the body of Loro Duem.
When she reached the plains of Lobesa, she transformed herself into a dog to avoid detection. But Lam Drukpa Kuenley recognised the demoness dog, killed it and buried it under the mound of a hill, which he said resembled the breast of a woman. He then said "Chi-med" (no dog), and built a black chorten on top of this mound. Before killing and burying the demoness, he made the demoness pledge service to the Buddha and became a protector of the dharma. She is now the local deity called Chhoekim who is the guardian deity of Chhime Lhakhang.
His cousin Lam Ngawang Choegyal later built a Lhakhang in honour of his illustrious relative and named it Chhime Lhakhang.
It is widely known today that most of the thousands of people who visit the lhakhag do so to pray for children either to ask for children by those who are childless or to seek protection for children that they already have. While Chhime Lhakhang is renowned for its fertility blessings, it also fulfils the other religious and spiritual needs of the people.
Chimmi Lhakhang was mentioned on a New York Times article, A Forgotten Prayer, Answered, dated 29 Dec 2011.