The grotto was formed in the Devonian limestone of the Elbingerode complex as the Bode Valley was being shaped. It was discovered in the 16th century and was visited by tourists from a very early stage. Amongst its most famous visitors was Johann Wolfgang von Goethe. The cave's biggest chamber, the Goethesaal, is named after him and is fitted with seats and a stage for concerts and plays.
The cave was sealed off from an early date so that its rich display of stalatites and stalagmites has been largely preserved. The cave is particularly famous for, amongst other things, the numerous bones of cave bears that have been found there.