This is second in size only to cave no. 02 and was built by King Kirthi Sri Rajasinghe (1747 – 1781 A.D.). His bearded statue and 57 Buddha Statues, with the central seated and reclining statues are found here.

On the outer wall is a scene of Anotaththe Vila (a mythical lake in the Himalayan range), with a Buddhist Bhikkhu trying to take a pot of water for the use of the Buddha.

The water of the Lake goes round it for 7 times and then the water goes to 5 rivers flowing in to India- Ganga, Yamuna, Achirawathie, Sarabhu and Mahie.

Four statues of Kakusanda, Konagama, Kassayapa and Gautama Buddha’s’ and 30 other statues are found in this cave.