The stepwell was built in 1485 by Dhai Harir, a household lady of Mahmud Begada according to the Persian iu age, established by the grace of God and of the faith, Abul Fath Mahmud Shah, son of Muhammad Shah, son of Ahmed Shah, son of Muhammad Shah, son of Muzaffar Shah the Sultan, may God keep his kingdom. Dated the metropolis of the kingdom the 2nd of Jamadi-ul-awwal in the 26th year of the reign.
A Sanskrit inscription says that the step-well was built in December 1499 AD. It was during the reign of Mahmud Shah that Bai Harir Sultani, locally known as Dhai Harir, built the step-well. The name later corrupted into Dada Hari. It costed 3,29,000 Mahmudis (₹ 3 lakh) at that time. The ornate step-well has spiral staircases pieced into the sidewall of the well shaft and descending to the different platform levels.