According to a Malay legend, a mysterious bloody event lies behind the name. In early times, when the island was populated by fishing villages, the fishermen were often threatened by swordfish attacks. A young boy who lived on the hill proposed a possible solution to theSultan: "Build a fence of banana tree trunks to ward off the swordfish". This was done, and the attacking swordfishes' long sharp beaks were stuck in the tree trunks, thus proving the boy right. The battle with the swordfish was won. The Sultan was alarmed by the boy's intelligence, fearing that the boy might gain popularity among the Sultan's subjects, and eventually overthrew him. Hence, he ordered his soldiers to kill the boy. While four soldiers were making their way up to the hill one night to kill the boy, they saw a fountain mysteriously spouting blood from the ground. The mysterious incident was conjured by a woman with long hair that appeared before the four soldiers. The soldiers were so terrified by the sight that they did not accomplish their death mission.
Another version of the legend has it that the boy was indeed killed, and his blood spilled down the hill and dyed the soil red, and thus the hill was named Bukit Merah, after Red hill.
From an scientific viewpoint, the area got its red-orange colouring due to the lateritic soils in the area, which when exposed without vegetation makes a striking impression of a "blood soaked" landscape.