Once in Vedic period there lived a demon called Andhakasura, who killed sages and seers.

Lord Shiva had to fight with demon to protect the world and killed him after a long war
which had continued for years. While fighting with the demon, the Lord Shiva was very
much tired and began to sweat profusely.
When the sweat fell down on the earth, a child was born of the drops of Shivas sweat.
The child looked very cruel and horrifying and consumed all the blood from the body of the
demon Andhakasura. His hunger was still not satisfied and felt very hungry. He began to
grow steadily, eating all that came near his mouth. He occupied almost all the surface of the
earth, killing all the inhabitants and destroying the nature. All the Five Elements of the
galaxy namely Earth, Water, Fire, Air & Sky suffered by the growth of this child and could
not carry on their functions.
This terrified even the Gods in heaven. All of the Gods in heaven grouped together planned
to kill the child that was grown up so largely. They attacked it from all sides, laid it face
down and they then sat on different parts of its body and pressed it inside the earth. Being
bound like that, the child lay submerged (buried).
In order to mollify the child the Gods bestowed the child with a boon that: Hence forth
you will be known as VASTUPURUSHA or VASTHUDEVTA. You will occupy any
piece of earth with boundaries made on four sides. The people will offer you prayers and
worship you. You can curse or favor the people who own or occupies any place of earth. If
they make you feel happy and comfort as you lay down on the earth you may favor them
with boons. If not you are allowed to curse and make them suffer.
Then the Vastu Purusha was quite satisfied. Since then the worship of Vastu-Purusha has
been in practice and it has become compulsory to follow certain rules so as to make the
Vasthu Purush happy and comfort. The Almighty ordered the Gods of heaven, who sat at
key positions over the child, to safe guard the child and protect him from the people.
Everyone shall pray and adopt the rules of Vasthu Shastra shall Live in the earth having
sound health, beautiful wife, healthy children, wealth, means of earning through business,
profession or state service, high reputation in society and over all mental and spiritual peace
without any disturbance and trouble.