The foundation of the Nicholas Monastery is closely linked to its founder, Theophilact Yakovlev. N. M. Shchegolkov reports 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 Prince Leonty Shaisupov, stating that the Nicholas women's monastery was built more than ninety years ago. At that time, priests were chosen by the parishioners, and it is likely that Theophilact himself became the abbot. The abbot of the Spassky Monastery, Sergius, gifted the church a carved icon of St. Nicholas and proposed to establish a women's monastery at the church, which Theophilact supported. He built another wooden church in the name of the Epiphany with a chapel of St. George the Victorious, living quarters, a bell tower, and 30 cells, enclosing the territory with a fence. In 1612, the second people's militia led by Minin and Pozharsky liberated Moscow, and in 1613, Mikhail Fyodorovich Romanov was elected to the throne. The tsar, supported by Patriarch Filaret, favored Arzamas and the Nicholas Monastery, confirming its rights to property and establishing state subsidies. In 1634, he founded a second women's monastery in Arzamas, the Alexeyevsky Monastery. In the early 17th century, Arzamas, like other Russian cities, often suffered from fires. In 1650, lightning caused a fire that destroyed both churches, the cells, and the fence of the Nicholas Monastery, as well as part of the Kremlin. The nuns likely found refuge in the Alexeyevsky Monastery.

By 1913, the monastery was fully improved. Its buildings were painted, and the paths and flower beds were pleasing to the eye. The interior decoration of the churches, with carved iconostases and icons, was the pride of the nuns, whose number reached 325. The sisters lived by their labor, working on the monastery lands, in the icon-painting workshop, sewing vestments, making shoes, and other products. The monastery adorned the city, and its architectural forms and the ringing of the bells delighted the residents and guests. Arzamas experienced fires but always recovered. However, the revolution dealt a more serious blow, destroying churches and the memory of ancestors. Nevertheless, spirituality has been preserved, and now the Nicholas Monastery is slowly being revived. Through the efforts of the nuns, the Epiphany Church, the main cathedral, and the bell tower have been restored, and golden stars shine once again on the blue domes.