Time of founding of the monastery is unknown, but the first historical sources (Studenica Typicon) mention it in the 12th century. In 1220 Banja became center of Dabar Episcopasy. There are three churches within the monastery, the Church of St. Nicholas, of St. Eliah and the Church of Ascension of the Holy Virgin. St. Nicholas Church, the main monastery church, was founded by King Stefan of Dečani (1322-1331) in 1329. The original church was burned during the Ottoman invasion. The church was restored in 1570 and gained its present look in 1904 when the last restoration took place. The monastery was not only center of the episcopate but the mausoleum of Vojnović family, one of the greatest families of that time.