The Monastery of St. Nicolas lies in a small dale at the south-western end of Arbanassi. It is thought to have been founded by the family of the Assens. It was robbed and burnt down in 1393, 1717 and 1729. It was abandoned in 1744 because of an epidemic of the plague. Almost all the monks died. It was first restored in 1630. The Church and some buildings containing cells were rebuilt with funds provided by a donor, the Boyar Atanassiy, a rich Arbanassi merchant who took part in a plot to dethrone the Sultan and was killed in a battle near Soushitsa (today Karlovo). The Monastery was burnt down in 1738, and rebuilt by the local population two years later. The church was used as a parish church. A new restoration was carried out in 1838 on the initiative of the energetic Father Zotik Preobrazhenski with funds collected from the population of Veliko Turnovo, Gorna Oryahovitsa, Layskovets, Arbanassi and the surrounding villages.

The church has a single aisle, a single apse, a high dome and a Chapel of St. Elijah on the north side which was built and consecrated on 15th April 1716. When repairs were made immediately after the Liberation from Ottoman bondage, the mural paintings in the men’s and the women’s sections were effaced and new ones painted over them. Many of the icons were gifts from Russian officers and soldiers.

The monastery keeps one of the very few preserved Royal appartments in Bulgaria (all the Orthodox monasteries used to have one but most of them were destroyed and robbed during the Comunism) with original belongings of the Royal family.