After Kavad I, the Hephthalites seem to have shifted their attention away from the Sasanian Empire, and Kavad's successor Khosrow I (531–579) was able to resume an expansionist policy to the east. According to al-Tabari, Khosrow I managed, through his expansionsit policy, to take control of "Sind, Bust, Al-Rukkhaj, Zabulistan, Tukharistan, Dardistan, and Kabulistan" as he ultimately defeated the Hephthalites with the help of the First Turkic Khaganate, the Göktürks.

In 552, the Göktürks took over Mongolia, formed the First Turkic Khaganate, and by 558 reached the Volga. Circa 555–567, the Turks of the First Turkic Khaganate and the Sasanians under Khosrow I allied against the Hephthalites and defeated them after an eight-day battle near Qarshi, the Battle of Bukhara, perhaps in 557.

These events put an end to the Hephthalite Empire, which fragmented into semi-independent Principalities, paying tribute to either the Sasanians or the Turks, depending on the military situation. After the defeat, the Hephthalites withdrew to Bactria and replaced king Gatfar with Faghanish, the ruler of Chaghaniyan. Thereafter, the area around the Oxus in Bactria contained numerous Hephthalites principalities, remnants of the great Hephthalite Empire destroyed by the alliance of the Turks and the Sasanians.

The Sasanians and Turks established a frontier for their zones of influence along the Oxus river, and the Hephthalite Principalities functioned as buffer states between two Empires. But when the Hephthalites chose Faghanish as their king in Chaganiyan, Khosrow I crossed the Oxus and put the Principalities of Chaghaniyan and Khuttal under tribute.