From 474 CE, Peroz I fought three wars with his former allies the Hephthalites. In the first two, he himself was captured and ransomed. Following his second defeat, he has to offer thirty mules loaded with silver drachms to the Hephthalites, and also had to leave his son Kavad as a hostage.

In the third battle, at the Battle of Herat (484), he was vanquished by the Hepthalite king Kun-khi, and for the next two years the Hephthalites plundered and controlled the eastern part of the Sasanian Empire. From 474 until the middle of the 6th century, the Sasanian Empire paid tribute to the Hephthalites.

Bactria came under formal Hephthalite rule from that time. Taxes were levied by the Hephthalites over the local population: a contract in the Bactrian language from the archive of the Kingdom of Rob, has been found, which mentions taxes from the Hephthalites, requiring the sale of land in order to pay these taxes.