A folktale regarding the establishment of the settlement of Tržič talks about a horrible dragon that unleashed an immense »landslide« of rocks from the ridge of the Košuta Massif and buried the original settlement under it. Even today, one can observe enormous quantities of rocks in Podljubelj and the Pod Košuto valley, as well as a huge failure surface on the slope of Mount Veliki Vrh as “silent witnesses” to the event. The rock avalanche most likely occurred in the late Middle Ages, and its sheer power and impact have been preserved in folk tradition. The article presents the folk tradition and modern knowledge on the rock avalanche.