Genghis Khan secured control over the eastern Silk Road and its adjacent territories, bordering the expansive Khwarazmian Empire. The halt of trade during Kuchlug's reign led to eagerness for its resumption. However, suspicions from the Khwarazmian side resulted in the massacre of a Mongol trade caravan in Otrar by Governor Inalchuq, an act that, whether directly supported or ignored by the Khwarazmian Shah Muhammad II, sparked Genghis Khan's wrath and led to a declaration of war.

The Khwarazmian Empire, though large, was fragmented and poorly unified under Muhammad II, making it vulnerable to the Mongols' mobile warfare tactics. The Mongols' initial target was Otrar, which, after a prolonged siege, fell in 1220. Genghis then split his forces, directing simultaneous assaults across the region, leading to the rapid capture of key cities like Bukhara and Samarkand. Muhammad II fled, pursued by Mongol generals, until his death in 1220–21.

In a remarkable display of mobility and military prowess, Mongol generals Jebe and Subutai conducted a 4,700-mile raid around the Caspian Sea, marking the Mongols' first significant interaction with Europe. Meanwhile, Genghis Khan's sons besieged and captured the Khwarazmian capital of Gurganj, with Jalal al-Din, Muhammad's successor, fleeing to India after a series of defeats.

Tolui's campaign in Khorasan was notably ruthless, with the destruction of major cities like Nishapur, Merv, and Herat, cementing Genghis Khan's legacy as a merciless conqueror. Though contemporary estimates of the death toll are seen as exaggerated by modern scholars, the campaign undeniably resulted in significant demographic impacts.