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Khandoba Mandir is situated on the main road. In front of this temple Baba was welcomed by Poojari Mhalsapati, of this temple, who said "Aao Sai", when Baba stepped in Shridi. In this temple there are icons of Khandoba, Banai and Mhalsai.
Lord Khandoba was tutelary deity of Mhlasapti, who was priest of Khandoba temple by heredity and he was then responsible for starting worship of Sai Baba. Khandoba temple which had its origin about 500 years ago was but natural rural and simple. It did not even had a door. There is large banyan tree where Sai Baba alighted with marriage party of Chand Patil at the entrance of Khandoba temple and it stands today also. Having felt calmness and peace at this place, Lord Sai Baba first decided to make this temple His residence, but Bhagat Mhlasapati thought Him to be Muslim and did not allow Him to stay there. Baba said to him while leaving, "If you do not wish that I should stay here, I will go away". Thenafter, Baba made an old dilapidated mosque of Shirdi His residence and lived there till His last breath.
Khandoba temple holds importance in other way too. Sai Baba asked Upasani Maharaj, a staunch and prominent devotee, to stay at this temple for four years for his spiritual upliftment .
Khandoba temple is well maintained, neat and calm place. It is 15 ft long and 15 ft in breath commemorated with a small shrine and Padukas as its base. A stone idol of Lord Khandoba is located in central shrine of the temple. Also idols of Lord Sai Baba and Mhlasapti are inscribed as a remembrance of event of Lord Baba coming to Shirdi. When it comes to daily rituals now, two artis at 12 noon and 6:00 PM are performed daily.
A rectangular sandpit is situated in front of the Khandoba temple which was used for fire-walking in those earlier days. Now this tradition has stopped. Even though during annual festival of "Champa Shashti" (usually occurs in December and celebrated for six days after new moon) devotees, to show their devotion, walk on hot coals in accompaniment of bhajans. The mythological story behind Champa Shashti is - being pleased by demons named Mal and Mani, Lord Brahma granted a boon of immortality to them. With passing time they grew evil and killed people. Lord Shiva took form of Lord Khandoba and fought a battle with them. Champa, Lord Khandoba's wife Champa prayed for her husband's victory. The battle resulted into defeat of the demons on sixth day and in that happiness, Champa gave a huge feast of Bharit (a dish made of roasted brinjal with curd and Indian spices) and Bhakhri (a dish made of Bajri - millet, similar to roti). This event marked celebration of "Champa Shashti" as a tradition. The defeat of Lord Khandoba made Him repent, so He walked bare-foot in rectangular sand-pit on which burning coal was kept.
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