The foundation of the Nicholas Monastery is closely linked to its founder, Theophilact Yakovlev. Historian N. M. Shchegolkov mentions in his accounts of the city of Arzamas that around 1580, a resident of Arzamas, Theophilact Yakovlev, built a wooden church in honor of St. Nicholas the Wonderworker at his own expense. This is confirmed by a decree from Tsar Alexei Mikhailovich dated March 28, 1670, addressed to the nobleman Prince Leontiy Shaisupov, which states that the Nicholas Maiden Monastery was founded around 1580 or earlier. The abbot of the Spassky Monastery, Sergiy, gifted the church a carved icon of St. Nicholas of Mozhaisk and suggested to Theophilact to establish a women's monastery at the church, which was supported. Theophilact built another wooden warm church in the name of the Epiphany with an altar of St. George the Victorious, living quarters, a wooden porch, a bell tower, and 30 cells, enclosing the territory with a fence. It is likely that a blessing for the creation of the monastery was received in advance.

In the early 17th century, Arzamas, like many other Russian cities, was built up with wooden buildings and often suffered from fires. In 1643, the Resurrection Cathedral burned down, and in 1650, lightning caused a fire that destroyed both churches, the cells, and the enclosure of the Nicholas Women's Monastery, as well as the towers of the Kremlin and part of the fortress wall. The wooden churches, icons, and church items turned to ashes. The fate of the nuns is unknown, but they may have found refuge in the Alexeyevsky Monastery. The monastery was revived, albeit on a smaller scale. According to Shchegolkov, in 1650, Theophilact's wife, the elder Pelageya, who, along with her sons Grigory and Afanasy, built a new wooden church in the name of the Epiphany, was still alive. The monastery was slowly revived, and this church remained the only one for about 30 years. They decided to build the second church out of stone, and the stone church in honor of St. Nicholas the Wonderworker was consecrated in 1683.

In 1738, the stone Nicholas church was restored, and a three-tiered bell tower was built. In 1740, a warm wooden church in the name of the Epiphany was erected. In 1926, the monastery was closed, renamed 'Komsomol Town,' and partially destroyed, while the sisters were dispersed.

On December 18, 2015, the Nicholas Cathedral was consecrated in the Arzamas Monastery, where the Bloodless Sacrifice is now performed daily. The carved icon of St. Nicholas of Mozhaisk, gifted at the foundation of the monastery, returned to the church. Soon, a miraculous icon of the Mother of God 'Deliverance from the Suffering' appeared in the monastery, and since then, the Queen of Heaven has supported the residents. Thousands of pilgrims visit the Nicholas Monastery annually, strengthening their faith and receiving healings and deliverance from troubles.