Where the St. Nicholas Monastery now stands, over six and a half centuries ago, there was a swampy area overgrown with forest and shrubs, near Lake Pleshcheyevo. Wooden Orthodox monasteries already stood on the surrounding hills, and nearby the swamp was the Borisoglebsk Monastery on the Sands, founded in 1252 at the burial site of the Tver princess and commander Zhidislav, who were killed by Tatars. Around 1350, another monastery dedicated to St. Nicholas appeared nearby, initially called "Nikolayevsky, that on the swamp." This name may be connected to the image of St. Nicholas, the patron of travelers and merchants. The founder of the monastery, Dmitry, was the son of a merchant but did not become one himself. He renounced his inheritance and took monastic vows at the Pereyaslavl Goritsky Monastery. According to tradition, Dmitry was a student and friend of Sergius of Radonezh. After founding his monastery in Pereslavl and becoming its abbot, he became renowned for his strict monastic life and gift of foresight. Dmitry became the godfather of the children of Grand Duke Dmitry Donskoy. In 1371, he, along with his disciple Pachomius, went into the northern forests near Vologda, where he founded the first communal monastery in the Russian North. The saint lived in the Spaso-Prilutsky Monastery for over 20 years and died in 1392. He began to be venerated as a saint due to miracles at his grave.

The Nicholas Monastery in Pereslavl has endured many trials. In 1382, it was ravaged by the Tatar hordes of Khan Tokhtamysh, and in 1408, the monastery was burned by the troops of Emir Edigei. The restoration of the monastery after these invasions remains a mystery, as the chronicles likely burned during the Time of Troubles. In the 15th century, the monastery was restored and flourished until the Time of Troubles when it was devastated by Polish-Lithuanian invaders. In 1613, monastic life resumed thanks to Elder Dionysius, who, according to tradition, received a command from St. Nicholas the Wonderworker to revive the monastery. His successor was Abbot Varlaam, the spiritual father of Cornelius the Silent.

In the late 17th century, the Korsun Cross appeared in the monastery, brought by schismatics from Suzdal. During the Soviet years, it was kept in the Pereslavl Museum-Reserve and became one of the relics of the Nicholas Cathedral. By the end of the 18th century, the monastery was rebuilt in stone with the help of Moscow benefactors. In 1898, the monastery became a women's monastery at the suggestion of A. Varentsov, as the male brotherhood had diminished. In the early 20th century, about a hundred nuns lived in the monastery. In 1923, the monastery was closed, but for some time, people lived there. In 1993, the monastery was returned to the Russian Orthodox Church. Since then, it has been restored, new churches have appeared, and the number of sisters has increased.

At the entrance to the monastery are the Holy Gates with the Church of Peter and Paul, built in 1748. Opposite is the Church of the Annunciation of the Most Holy Theotokos, also built in 1748. The interior paintings of the church were discovered under a layer of lime and restored. The monastery houses a reliquary with the relics of saints from the Kiev-Pechersk Lavra. The main church of the monastery, the Nicholas Cathedral with golden domes, was built in the early 21st century. It is the tallest and most spacious church in Pereslavl. The cathedral was erected thanks to the efforts of the sisters of the monastery and benefactor Viktor Ivanovich Tyryshkin. The interior decoration of the cathedral includes marble and granite floors, a gilded iconostasis, and marble iconostases in the chapels. The cathedral houses the relics of Pereslavl saints and ancient icons. Behind the cathedral is a cemetery where clergymen and pious laypeople are buried. In summer, the monastery is adorned with flower beds created by the sisters.