As one approaches the Kailash Temple a small hill rises to the right, at the top of which is a small circular opening known as Sai Baba’s cave.  It is interesting to note that this cave sits atop the hill looking down at the Ellora caves; perhaps symbolically unify ing perhaps the four major 'isms' represented there, i.e. Islam, Hinduism, Buddhism and Jainism.
According to Meher Baba, this cave was important to the Sufi Perfect Master Zar Zari Zar Baksh in the 14th century as well as to His disciple, and one of Meher Baba’s Masters, Sai Baba of Shirdi, in the early nineteenth century.Sai Baba died in 1918.

Sai Baba was a sixteen year old youth when his blind master, Gopal Rao, before dropping his body, passed on his spiritual charge and responsibilities to him.  Following this event, the young Sai eventually came to the small village of Shirdi where a Hindu priest named, Bhagat Malsapati, greeted him wiht the words, “Hah Sai, Hah” (Welcome Lord.)  From that day onward the young Fakir became known as Sai.
Soon afterwards he left Shirdi and wandered around the hills surrounding the Ellora caves where he was drawn to and entered a small cave atop a hill called Hoda.Meher Baba has explained that Sai was drawn to this particular cave because it had been associated with his master from a previous life, the Sufi Perfect Master Zar Zari Zar-bakhsh seven hundred years before.Because of the past connection and service rendered him at that time, Zar Zari Zar-baksh’s grace descended upon the young Sai in this cave even though his former Master was not in physical form.As a result, Sai became God-Realized during the time he inhabited that cave.After attaining God-Realization, Sai Baba entered into a Majzoobiyat state going without food or water the entire time.He emerged several years later looking like a living skeleton.Later, after being brought down to consciousness of the “three worlds” by the famous Maharastran Perfect Master, Akalkot Maharaj, Sai Baba began to perform his divine work as a Perfect Master at the age of 22.

Meher Baba used to sit in seclusion doing His universal work in this cave as the Mandali kept watch outside.Baba has stated that Sai Baba was the Qutub e-Irshad, the head of the five Perfect Masters of the age, who precipitated His advent as the Avatar.The cave has now become a popular place to visit while at the Ellora Caves/Khuldabad because of its intimate association with two Perfect Masters and the Avatar, Meher Baba.