The religion of Vijayanagara was characterised by intense religious activity in southern India. Various sects and sub-sects emerged, temples assumed great importance and "mathas" fostered the spread of religion and learning.

A towering figure in the Hindu renaissance of the early medieval era was the great Shankaracharya (AD 781-820), who had given a definite shape to the monistic or non-dualistic school of philosophy known as the Advaita system, the followers of which are known as the Smartas. The two important Advaita "mathas" at Sringeri and Kanchipuram, besides a number of others, propagated the Smarta religious system and the Advaita philosophy in southern India. Inscriptions from AD 1346 onwards reveal the close links between the Vijayanagara rulers and the former "matha".

The Pasupata sect of Shaivism and its offshoots, the Kapalika and Kalamukha, were important Saivite sects. However, by the time of the establishment of the Vijayanagara kingdom, the Pasupatas and the Kapalikas appear to have lost their influence. The Kalamukhas continued to be popular till the early fifteenth century. The later history says that the Kalamukhas did not appear after fifteenth century and it is probable that the sect was absorbed by the reformist Virashaiva religion. Other important Saivite schools were the Shaiva-Siddhanta and Shivadvaita. The most important Saivite group in the Vijayanagara times was the Virashaiva or the Lingayat sect. The Virashaiva reform during the twelfth century AD spread rapidly from Karnataka to Andhra Pradesh and Tamil Nadu . The Virashaivas are also called the Lingayats on account of the linga that the followers of this sect wear. Besides the Vedas, the Agamas and the Puranas, the Virashaivas accept the authority of the sixty-three Tamil Shaiva saints and 770 later Virashaiva saints. This new faith is a departure from the ritualism of the Vedic traditions and social practices.

Vaishnavism received a great momentum in southern India, catalyzed by the work of the two great Acharyas namely Ramanuja and Madhava. Ramanuja (AD1017-1137), the great philosopher of Visistadvaita, or qualified monism, followed a long line of Vaishnava thinkers in Tamil Nadu. Twelve poet saints had expressed their intense devotion in the form of songs that constitute the basis of Visistadvaita, equally with the Upanisads and the Bhagavata Purana . The poet saints were followed by a succession of Acharyas, the greatest of whom was Ramanuja. According to the religious system of the Acharyas, Vishnu is the supreme deity, accompanied by Sri or Lakshmi, who represents divine grace. That is why this religion is called Sri-Vaishnavism. This sect won many followers in Tamil Nadu and had also spread to parts of Karnataka before the Vijayanagara period. In the early fourteenth century the Sri-Vaishnava sect split into two divisions, viz. the Vadagalai and the Tengalai.

Madhavacharya (AD1238-1317) preached the philosophy of Dvaita or dualism in Karnataka. Following the Dvaita philosophy of Madhvacharya, a movement started in Karnataka in the fifteenth century, known as the Haridasa movement. This movement became widely popular in the Vijayanagara kingdom and furthered the spread of the Vishnu cult. Purandaradasa was a great Haridasa who was closely associated with Vijayanagara city.

Besides the Shaivite and Vaishnavite sects, there was also the Sakta cult; the Saktas worship the supreme deity exclusively as the female principle. At the same time, side by side with the "greater" or Sanskritik sects of Shaivism, Vaishnavism and Shaktism, there also existed the "lesser" or non-Sanskritik cults of the popular or folk deities. Most of the deities of these cults were female divinities. The fertility cult and the predominant role of women in an agrarian society, perhaps, were the reasons for this. The worship of snakes represented by snake-stones, of sacred trees and of men and women who had died under heroic circumstances were also a part of popular religiosity.

Jainism had been a dominant religion in this region for about fifteen centuries. But the Hindu renaissance struck a death blow to Jainism and before the fourteenth century it had disappeared from many parts of southern India. Its last stronghold in the south was in Karnataka. Even though the Virashaiva movement resulted in the further decline of Jainism, the latter continued to be fairly influential in Karnataka during the early Vijayanagara period, strengthened by patronage from the rulers. However, by the sixteenth century, Jainism"s decline, even in Karnataka, had become marked.

Among other religions co-existing in southern India was Islam, which reached south India via the Arab traders who settled along the west coast. However, the presence of Islam was felt throughout southern India only in the aftermath of the invasions from the north in the early fourteenth century. During the Vijayanagara period the employment of Muslim soldiers in the army resulted in a greater Muslim presence. Although there were Christian communities in Malabar long before the Vijayanagara period, it was only with the coming of the Portuguese that Christianity spread to other areas. However, the impact of Christianity remained minimal during the period under survey.

In so far as the sectarian affiliations of the Vijayanagara rulers are concerned, it is clear that the Sangamas were Shaivas. The early rulers of this dynasty had Kalamukha gurus as their preceptors, but at the same time there was also a close link between the monks of the Sringeri Advaita matha and the Vijayanagara state, at least from 1346 AD onwards. The name of Vidyaranya, a pontiff of this monastic lineage, is closely associated with the early history of Vijayanagara. Virashaivism was influential in the later Sangama period. According to one school of thought, Devaraya II and his immediate successors were Lingayats, and although there is no conclusive evidence to support this contention, it is undoubtedly true that this sect did enjoy royal favour.

A shift to Vaishnavism occurred with the change in dynasty. Saluva Narasimha was a devotee of Verikatesvara of Tirumalai-Tirupati, as were numerous Tuluvas and Aravldus who were also greatly devoted to this deity. Since the Saluvas and Tuluvas were staunch Vaishnavas, Vaishnava sectarians, both Sri-Vaishnavas and Madhavas, Vaishnava temples and institutions gained in prominence during their rule.

Harihara I and his successors had placed the realm under the protection of Sri Virupaksha, the local deity of the Hampi area where they pitched their capital. Virupaksha is considered to be a form of Shiva. "Sri Virupaksha" was adopted as the sign-manual of the Vijayanagara rulers. As long as the capital remained at Vijayanagara city there was no alteration in this practice, which continued till the early seventeenth century when the king Verikata II replaced "Sri Virupaksha" by "Sri Verikatesa" as the official signature.

Despite their sectarian preferences, the Vijayanagara rulers, on the whole, adopted the deliberate policy of tolerance towards all sects, so as to incorporate them all within the polity. Devaraya II endowed Sri Vaishnava temples at Srirangam and Tirumalai, favoured Jain institutions in the capital and elsewhere, employed Muslims in his army and allowed them to practice their religion freely. The Vaishnava Krishnadevaraya bestowed showered grants and gifts on Shaiva temples, and Achyutaraya on the occasion of his coronation gave an equal number of villages to the Shaiva and Vaishnava temples of Ekambaranatha and Varadaraja respectively, at Kanchipuram. However, under Sadashiva and Ramaraya, although there was no persecution of Shaiva institutions, the official patronage was primarily extended towards Sri-Vaishnava ones. This departure from the traditional policy had unhappy consequences.