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The Greco-Bactrian Kingdom was founded when Diodotus I, the satrap of Bactria (and probably the surrounding provinces) seceded from the Seleucid Empire around 250 BC.

The preserved ancient sources (see below) are somewhat contradictory and the exact date of Bactrian independence has not been settled. The new kingdom, highly urbanized and considered as one of the richest of the Orient (opulentissimum illud mille urbium Bactrianum imperium "The extremely prosperous Bactrian empire of the thousand cities" Justin, XLI,1The Greeks who caused Bactria to revolt grew so powerful on account of the fertility of the country that they became masters, not only of Ariana, but also of India, as Apollodorus of Artemita says: and more tribes were subdued by them than by Alexander...

Somewhat simplified, there is a high chronology (c. Their cities were Bactra (also called Zariaspa, through which flows a river bearing the same name and emptying into the Oxus), and Darapsa, and several others.

Among these was Eucratidia, which was named after its ruler.

When the ruler of neighbouring Parthia, the former satrap and self-proclaimed king Andragoras, was eliminated by Arsaces, the rise of the Parthian Empire cut off the Greco-Bactrians from direct contact with the Greek world.

Some Greeks (Yavanas) may have played an administrative role in the territories ruled by Ashoka: the Junagadh rock inscription of Rudradaman records that during the rule of Ashoka, a Yavana King/ Governor named Tushaspha was in charge in the area of Girnar, Gujarat, mentioning his role in the construction of a water reservoir.And the Iaxartes forms also the boundary between the Sogdians and the nomads. He then successfully resisted a three-year siege in the fortified city of Bactra (modern Balkh), before Antiochus finally decided to recognize the new ruler, and to offer one of his daughters to Euthydemus's son Demetrius around 206 BC.Classical accounts also relate that Euthydemus negotiated peace with Antiochus III by suggesting that he deserved credit for overthrowing the original rebel Diodotus, and that he was protecting Central Asia from nomadic invasions thanks to his defensive efforts: ..if he did not yield to this demand, neither of them would be safe: seeing that great hordes of Nomads were close at hand, who were a danger to both; and that if they admitted them into the country, it would certainly be utterly barbarised.Following the death of Menander, most of his empire splintered and Indo-Greek influence was considerably reduced.Many new kingdoms and republics east of the Ravi River began to mint new coinage depicting military victories.Accordingly, Seleucus ceded to Chandragupta his northwestern territories, possibly as far as Arachosia and received 500 war elephants (which played a key role in the victory of Seleucus at the Battle of Ipsus): The Indians occupy in part some of the countries situated along the Indus, which formerly belonged to the Persians: Alexander deprived the Ariani of them, and established there settlements of his own.But Seleucus Nicator gave them to Sandrocottus in consequence of a marriage contract, and received in return five hundred elephants.In 305 BC, Seleucus I led an army to the Indus, where he encountered Chandragupta.The confrontation ended with a peace treaty, and "an intermarriage agreement" (Epigamia, Greek: Ἐπιγαμία), meaning either a dynastic marriage or an agreement for intermarriage between Indians and Greeks.He had his capital at Sakala in the Punjab (present-day Sialkot).The expression "Indo-Greek Kingdom" loosely describes a number of various dynastic polities, traditionally associated with a number of regional capitals like Taxila, Other potential centers are only hinted at; for instance, Ptolemy's Geographia and the nomenclature of later kings suggest that a certain Theophila in the south of the Indo-Greek sphere of influence may also have been a satrapal or royal seat at one time.

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