Legend has it that the Caigangue Indians, who inhabited the banks of the Iguaçú river, believed that the world was ruled by M'Boy, a god in the shape of a serpent and who was the son of Tupa. Igobi, the tribe chieftain, had a daughter named Naipi, who was so beautiful that the water of the river remained still every time she looked at herself in them. Because of her beauty, Naipi had been promised to M'Boy and lived solely to worship the god. However, there was among the Caiguange a young warrior named Tarobá, who fell in love with Naipi.

On the day the beautiful Indian maiden was to be consecrated, while the chieftain and the witch doctor drank cauim (a drink made of fermented corn) and the warriors were busy dancing, Tarobá took the opportunity and eloped down river on a canoe with beautiful Naipi. When M'Boy realized that Tarobá and Naipi had run away together, became furious and dove deep into the ground, twisting his body and producing a large gorge that gave birth to a huge waterfall.

Engulfed by the water, the canoe and the escapees fell from a great height and disappeared forever. The legend says that Naipi was turned into one of the rocks in the center of the falls, which is permanently flogged by the raging waters.

Tarobá was turned into a palm tree standing at the edge of a cliff, leaning on the river gorge. Under this palm tree, there is the entrance of a cave under the Devil's Gorge where the vengeful monster lies eternally watching its two victims.