Birth: Dattatreya had descended into the realm of world as progeny of Atri and Anusuya, a sage couple of the Vedic age. Anusuya became very famous for her devotion to her husband. She was the embodiment of chastity. Such was her spiritual power that hard, uneven earth turned soft and smooth for her as she walked about. This pious woman induced jealousy and envy in others, however, and the three Gods decided to prove these doubting elements how wrong they were. They transformed themselves into mendicants, approached the hermitage of sage Atri and begged for alms. At that time sage Atri was away at the river offering his daily oblations. Anusuya came out and offered food to them. They made a strange request; the food be prepared and served to them by Anusuya, in the nude. In the Indian tradition any 'athithi' (guest) cannot be turned away, as they are considered to be an aspect of God. Hence she was placed in a dilemma. She smiled to herself and reflected thus: ‘I am totally purified by the long association with the holy sage Atri. What harm can the god of lust ever do to me? So I do fear nothing. As they have sought food from my hands, I look upon them as my own children and not as strangers and grown up men!’ Her thoughts – the thoughts of a pious and chaste person – instantly became reality; the elderly guests became babies! Sage Atri on his return to the hermitage saw his wife Anusuya fondling three babies. Anusuya said "These children are the gift of God to us who have been childless so far". Sage Atri was overjoyed and named them Datta, which means 'given'. At this the three Gods reverted to their real forms and disclosed the truth. They extolled the power of chastity and purity of Anusuya which vanquished the combined and colossal powers of all three of them. Sage Atri and Anusuya prayed that they should remain as their sons. They consented and the three Gods merged into one body. This is how Shri Dattatreya incarnated and is known as Gurudeva Datta – the Guru of all Gurus.
Lord Dattatreya is the incarnation of Brahma, Vishnu and Shiva. Sage Narada praised Anusuya's "pativratyam" (Devotion to her husband) a lot before the wives of Brahma-Vishnu-Shiva making them jealous of her. They requested their husbands to reduce her pativratyam. Brahma, Vishnu and Shiva went to Anusuya as guests when Atri was not there at home and asked her to serve them food. When she agreed to do so, they said that they will accept her alms on the condition that she serves them without wearing clothes. Anasuya falls into a dilemma. If she comes without clothes in front of other men her pativratyam will be reduced. If she refuses then that is dishonour to the guests and they can take away all the power of Atri. Anasuya felt that the three guests who asked such a strange favor are not normal people since they are trying to place her in a tricky situation. Anasuya prayed to her husband in her mind and said that she doesn't have any fear serving them without clothes as she is not affected by lust. Since the guests asked for alms saying "Bhavati Bhiksham Dehi" (Oh Mother! Give us some food) and indirectly called her a mother. She decided that she will consider them as her children and serve them as requested. Because of her greatness and as per her thinking by the time she came to serve food the three gods became small children and her breasts started producing milk. She then breastfed them and put them to sleep in a cradle. Atri came back afterwards and hearing the story from Anasusuya praised the three gods sleeping in the cradle. They woke up in their original form and praised Anasuya's pativratyam and gave her a boon. Anasuya requested that these three should be born as her children—the incarnation of Shiva, Vishnu and Brahma as sage Durvasa, Dattareya and the moon-god Chandra.