The calcium oxide-rich waters flowing down the southern slope of Caldag located north of the ruins have, over the millennia, built up deposits forming white travertine on the plateau justifying both the site's ancient name of Hierapolis ("Holy City") and the modern one of Pamukkale ("Cotton Castle").

Ancient Hierapolis appears to have been founded by King Eumenes II of Pergamon and its name is derived from Hiera, the wife of King Telephos, the legendary founder of Pergamon. The city became Roman in 133 B.C. The well preserved theatre of Hierapolis commands magnificent views of the plain below.

The original theatre was located above the northern gate, but when the city was rebuilt during the reign of the Flavian emperors (60 A.D.) the theatre was relocated to its current place. Seats from the old structure were re-used during the restoration works.