The Crystal Cave was located in the Jedi Temple on the planet Ilum. It was a sacred place where Jedi younglings would go find their lightsaber crystals in the ritual known as the Gathering.
After Ilum was discovered tens of thousands of years before the Galactic Empire's creation by a Jedi scout, one of the later survey teams ultimately discovered the vast quantity of naturally-forming kyber crystals such as pontite and mephite. The Jedi Order's High Council dispatched scholars, artisans and warriors to secure the planet.
Following the discovery of the cave by the survey teams, which was considered to be the largest and richest cavern complex, the Jedi Council established a massive, baroque temple over the entrance.
By 18 BBY, the Galactic Empire had smashed the waterfall entrance to the cave to gain entry, removing the cliff-side entryway the Jedi had used for generations.