The monastery was built during the second half of the 10th century by three monks, Athanasius, Nicholas, and Antonius, who were disciples of Athanasius the Athonite. The monastery is located in a valley full of bushes, thorny briers, thus is the name Vatopedi (plain of thorny briers). According to tradition though, a son of Byzantine emperor Theodosios on his way to Rome got in a storm near the shore where the monastery is standing today. The ship sank, but Arkadios was found sleeping under a bush not far from the waterfront.

As the emperor built the monastery to thank the God for the miracle he gave that name to it, Vato - paidi (the child of the brier). Whatever is the origin of the monastery, from 11th century and until today, it is the 2nd important in Mount Athos.

The official patrons of the monastery were emperors of Komninos family. The rulers of Serbia were also contributing to the Vatopedi and one of them, Stefanos Nemanja (Symeon, as he became a monk), joined his son Sava (formerly Rastko) in the monastery. Later both Simeon and Sava left Vatopedi and moved to monastery Helandarion, renovating it and making on of the prominent monasteries in Mount Athos.

Most buildings of Vatopedi have been constructed during the Byzantine period and during the 18th and 19th centuries when the monastery reached its highest peak. More than 120 monks live in the monastery today, where extensive construction projects are underway to restore the larger buildings.

The Monastery of Vatopedi holds the Cincture of the Theotokos, according to tradition the actual belt of the Theotokos, which she wore on earth and gave to Thomas the Apostle after her death and during her transition to heaven. The silver and jewel-encrusted reliquary containing the skull of St. John Chrysostom is kept in the Monastery and is credited with miraculous healings.

The monastery also contains the Iaspis, a chalice fashioned of a single piece of the precious stone jasper, as well as many miraculous icons of Virgin Mary and about 3000 icons of big historical and esthetic value.

One of the treasures of the monastery is the early-14th century Codex Vatopedinus 655, which includes numerous peripluses, extracts from Strabo and Ptolemy's geographical works, and early maps.

Vatopedi's library holds 2,000 manuscripts and 35,000 printed books and preserves a medieval royal charter, the 13th-century Vatopedi Charter of Ivan Asen II of Bulgaria dedicated to the monastery. It was discovered in the monastery's archives in 1929.