The name Balasore is believed to have originated from the name Baneswar, which comes from name of a temple in the town dedicated to Mahadeba Baneswara. This temple, located in Puruna Balasore, was named after Banasura, a demon king who was said to have built it during the Dwapara Juga.The demon king Banasura is said to have lived in the area of town now known as "Sunahata". Banasura used to visit this temple along with four other shrines, namely Gadgadeswara in Remuna, Khajureswara near Seragada, Bakreswara in the village of Bankeswara, and Maninageswara in Bardhanpur, every morning and return to his palace by midday after performing his worship.There are two large tanks near the supposed site of Banasura's palace. The village of Ushamerh, believed to be the dwelling of Banasura's daughter Usha, still has remains of the moat around it.
Additionally, Baneswara was also known as the lord of the forest, which suggests that the town of Balasore and its surrounding areas were once covered in dense forest.Some people also believe that Balasore could be a variation of Baleswara, where Bala signifies young and Iswara means god, i.e.,the young lord,Lord Krishna. According to some sources, Balasore may also have been derived it’s name from the Persian word “Bala-e-Shore", meaning "town on the sea", which may have appealed to the Europeans who arrived there to explore the possibilities of establishing a port for their maritime trade.