It is said that Gautama Buddha had delivered his lectures in a mango grove near Nalanda. One of Buddha's chief disciples, Shariputra, was born in the area and later attained Nirvana there. In the 3rd century CE, Emperor Ashoka, the most famous ruler of Ancient India, built a great temple at the site of Shariputra's chaitya* in Nalanda to express his deep respect to Buddhism.

From 5th century CE to circa 1200 CE, Nalanda flourished and became a centre of Buddhist studying in India and Asia. Most famous Buddhist pilgrims, including Xuanzang (a Chinese monk who made the journey to India for Buddhist scriptures), had visited Nalanda to study or translate Buddhist books into their mother language. The emperors like Buddhagupta, Tathagatagupta, Baladitya,... provided money, materials and labours to expand the university by building more monasteries and temples.

The subjects taught at Nalanda covered every field of learning, for example, Xuanzang had learned grammar, logic, and Sanskrit during the time he stayed at the university. Nalanda attracted scholars from many Asian countries. There were even some scholars from Turkey, said historians.

However, Nalanda was ransacked and destroyed in circa 1200 CE by a Muslim army of Bakhtiyar Khilji. This army had slain all the monks who was staying at Nalanda and burn everything, including the library. Some legends tell us that the library of Nalanda was so big that it took 3 months for the fire to burn the entire library.

The name of Nalanda was forgotten for so many years after being destroyed. In 1811, Francis Buchanan-Hamilton, a Scottish physician, discovered the remains of the ancient university and one hundred years later, from 1915 to 1937, a systematic excavation of Nalanda's ruins began. It was run by Archaeological Survey of India (ASI).

From 1974 to 1982, the second round of excavation and restoration took place and numerous sculptures, murals, copper plates, inscriptions, seals, coins, plaques, potteries and works in stone, bronze, stucco and terracotta have been unearthed within the ruins of Nalanda.

Near the archaeological site of Nalanda, a new Buddhist university funded by the Indian government and other countries including China, Singapore, Australia, Thailand,... has been built. The university has acquired 455 acres of land for its campus and it is expected to inherit every values of the ancient Nalanda and contribute to the development of Buddhism in the world.