Though archaeologists have discovered evidence of prehistoric settlement, inscriptions indicate that construction of the city began under Darius I, who, as a member of a new branch of the royal house, made Persepolis the capital of Persia proper, replacing Pasargadae, the burial place of Cyrus II (the Great). Built in a remote and mountainous region, Persepolis was an inconvenient royal residence, visited mainly in the spring. The effective administration of the Achaemenid realms was carried on from the imperial cities of Susa, Babylon, and Ecbatana. This accounts for the Greeks being unacquainted with Persepolis until Alexander the Great’s invasion of Asia. In 330 bce, during the reign of Darius III, Alexander plundered the city and burned the palace of Xerxes, whose brutal campaign to invade Greece more than a century before had led, eventually, to Alexander’s conquest of the Persian empire. In 316 bce Persepolis was still the capital of Persis as a province of the Macedonian empire. The city gradually declined under the Seleucid kingdom and after, its ruins attesting its ancient glory.

About 200 ce the nearby city of Istakhr (Estakhr, Stakhr) was the seat of local government, and Istakhr acquired importance as a center of priestly wisdom and orthodoxy. Thereafter the city became the center of the Persian Sasanian dynasty, though the stone ruins that still stand just west of Persepolis suggest that Istakhr dates from Achaemenid times. The Sasanian kings (3rd–7th century ce) covered the face of the rocks in that neighborhood—and in part even the Achaemenid ruins—with their sculptures and inscriptions in Pahlavi and must themselves have built largely at Persepolis, although never on the same scale as their ancient predecessors. The Romans knew as little about Istakhr as the Greeks had about Persepolis, in spite of the fact that for 400 years the Sasanians maintained relations, friendly or hostile, with the Roman Empire.

At the time of the Arab conquest, Istakhr offered a desperate resistance. The city was still a place of considerable importance in the first century of Islam, although its greatness was soon to be eclipsed by the new metropolis of Shiraz. By the 10th century ce it had become an insignificant place, as may be seen from a description of it written by the Arab geographer al-Maqdisī (c. 985). In the mid-11th century the Seljuq emir Qutulmish razed it and transferred its population to Shiraz.