The temple is believed to have been constructed by a prominent Jain family between 950 and 970 CE, during the reign of the Chandela king Dhanga. A 954 CE (1011 VS) inscription on the left door jamb of the temple records gifts and endowments of gardens by one Pahila. The gardens are named Pahila-vatika, Chandra-vatika, Laghuchandra-vatika, Shankara-vatika, Panchaitala-vatika, Amra-vatika and Dhanga-vadi. The inscription describes Pahila as a devotee of Jinanatha and states that he was held in great esteem by the king Dhanga.
The earliest idol enshrined in the temple appears to have been that of Adinatha. When the British archaeological surveyor Alexander Cunningham visited in 1852, he found the main sanctum deserted. He described it as "Jinanatha temple" and wrote that it had been repaired by a Jain banker in 1847. In 1860, a Parshvanatha idol was installed in the main sanctum. An Adinatha statue was placed in a secondary shrine attached to the rear of the temple.
The Parshvanatha temple is the largest among the Jain temples of Khajuraho. It has an entrance porch, a small hall, a large hall (mandapa), a vestibule, and a sanctum. The temple structure has an oblong architectural plan with projections at two ends. The front (eastern) projection forms the entrance porch, the back (western) projection is a shrine attached to the sanctum.
The ceiling of the entrance porch features chain and floral patterns, and a pair of intertwined flying vidyadharas. The door-lintel of the mandapa has the sculpture of Adinatha's attendant: a ten-armed Chakreshvari riding a Garuda. The sanctum features sculptures of the Jinas.
Interior of the temple with Jain deities
The outer walls have three bands of sculptures. These sculptures feature surasundaris (graceful women), flying couples, dancers, musicians, and celestial beings. Despite the temple's Jain affiliation, the outer walls also depict Vaishnavite themes including sculptures of Hindu gods and their incarnations with their consorts. These include Vishnu-Lakshmi, Rama-Sita, Balarama-Revati, Parashurama, Hanuman, Brahma and Yamalarjuna legend of Krishna. These sculptures are similar to those of the Lakshmana Temple in modeling, proportions and poise. Unlike the Lakshmana temple, the Parshvanatha temple doesn't feature explicit erotic sculptures, although one particular image appears to show a cross-legged apsaramasturbating with an object.