Literature is an expression of feeling and of thought written by contextual value of a language. It refers to the concept of oral or folk literature which includes the literature expression of society’s culture passed on upon descend and through spoken word. The legend of Tan Tik Siu cave is one of oral literature originated from Tulungagung which grew and expanded in Sumberagung village Rejotangan subdistrict. The problem of the study focused on how are the cultural values and its functions for the society. A descriptive qualitative approach is employed through observation, interview, audio-recording and notetaking. The structure is the relationship between the building elements in the whole arrangements. The relationship between the element can be dramatic, logical and time. The structural concepts used in this study are plot, character and background. The analysis of cultural value suggested four kinds of cultural values including: (1) magic value, especially the society’s belief on pesugihan /a particular magic, (2) behavior value applied to the surrounding society, and (3) religious value. The result function analysis found four kinds of functions which cover: (1) projection system as a one’s thoughts on the future doing, (2) validation instrument of cultural research organization (3) education instrument (4) entertainment instrument