Simtokha Dzong stands at a strategic point at the entrance to the Thimphu valley. When Zhabdrung Ngawang Namgyel was subduing the demons in the Thimphu Valley, a demon disappeared into a big stone where Semtokha Dzong stands today. The place was called Sinmo Dokha (Demon on the stone). This was constructed n the year 1629. Zhabdrung Rinpoche named this Dzong as Sanga Zapdon Dzong.
This dzong is the oldest dzong in the country and today it houses the Rigzhubg Institute for Buddhist studies.