This Gurudwara commemorates Mata Kaulan Ji, a devout Muslim woman and the daughter of the Qazi of Lahore. Her father condemned her to death due to her devotion to Shri Guru Hargobind Sahib Ji. Sai Mian Meer Ji, who resided in the same village, rescued her and brought her under the protection of Shri Guru Hargobind Sahib Ji.

Mata Kaulan Ji dedicated the rest of her life to serving humanity and meditating. She once expressed a desire to have a son by marrying Guru Sahib. Guru Sahib, understanding her emotions, guided her towards enlightenment. Mata Ji then expressed concern that she would be forgotten after her death.

In response, Guru Sahib assured her that her name would be remembered forever through the holy sarovar. He instructed all devotees to bathe in Kaulsar Sahib Sarovar before visiting Shri Harimandir Sahib