Around 850 BC the original nomadic people who began the empire called themselves the Parsa and their constantly shifting territory Parsua, for the most part localized around Persis. The name "Persia" is a Greek and Latin pronunciation of the native word referring to the country of the people originating from Persis. The Persian term Xšāça, literally meaning "The Kingdom", was used to refer to the Empire formed by their multinational state.

The Achaemenid Empire was created by nomadic Persians. The Persians were an Iranian people who arrived in what is today Iran c. 1000 BC and settled a region including north-western Iran, the Zagros Mountains and Persis alongside the native Elamites. The Persians were originally nomadic pastoralists in the western Iranian Plateau. The Achaemenid Empire may not have been the first Iranian empire, as the Medes, another group of Iranian peoples, possibly established a short-lived empire when they played a major role in the overthrow of the Assyrians.

The Achaemenian empire borrows its name from the ancestor of Cyrus the Great, the founder of the empire, Achaemenes. The term Achaemenid means "of the family of the Achaemenis/Achaemenes". Achaemenes was himself a minor seventh-century ruler of the Anshan in southwestern Iran, and a vassal of Assyria.

The Persian Revolt was a campaign led by Cyrus the Great in which the province of ancient Persis, which had been under Median rule, declared its independence and fought a successful revolution, separating from the Median Empire. Cyrus and the Persians did not stop there, however, and in turn went on and conquered the Medes.

The revolt lasted from 552 BC to 550 BC. The war spread to other provinces who allied with the Persians. The Medes had early successes in battle, but the comeback by Cyrus the Great and his army, which is said to have included Harpagus, now allied with the Persians, was too overwhelming, and the Medes were finally conquered by 549 BC. Thus the first official Persian Empire was born.

The Battle of Hyrba was the first battle between the Persians and Medians, taking place around 552 BC. It was also the first battle after the Persians had revolted. These actions were led (for the most part) by Cyrus the Great, as he shifted the powers of the ancient Middle East. The Persian success in the battle led to the creation of Persia's first empire and began Cyrus's decade long conquest of almost all of the known world. Though the only authority with a detailed account of the battle was Nicolaus of Damascus, other well-known historians such as Herodotus, Ctesias, and Strabo also mention the battle in their own accounts.

The outcome of the battle was such a great blow to the Medes that Astyages decided to personally invade Persia. The hasty invasion eventually led to his downfall. In turn, the former enemies of the Medes tried to move against them, only to be stopped by Cyrus. Thus a period of reconciliation began, which facilitated a close relationship between the Persians and Medes, and enabled Ecbatana, capital of Media, to pass to the Persians as one of Persia's capitals in the newly formed empire. Years after the war, the Persians and Medes still held a deep appreciation of one another, and some Medes were allowed to become part of the Persian Immortals.

Croesus learned of the sudden Persian uprising and defeat of his longtime rivals, the Medes. He attempted to use these set of events to expand his borders upon the eastern frontier of Lydia, by making an alliance with Chaldea, Egypt and several Greek city-states, including Sparta. Prior to his invasion, Croesus asked the Oracle of Delphi for advice. The Oracle suggested vaguely that, "if King Croesus crosses the Halys River, a great empire will be destroyed." Croesus received these words most favorably, instigating a war that would ironically and eventually end not the Persian Empire but his own.

Croesus began the campaign with an invasion of Cappadocia, crossing the Halys and capturing Pteria, then capital of the district and formidable as a fortress. The city was sacked, and the inhabitants enslaved. Cyrus advanced to halt the Lydian incursion. He incorporated northern Mesopotamia, while receiving the voluntary capitulation of Armenia, Cappadocia, and Cilicia.

Both armies met in the vicinity of the fallen city. The battle appears to have been fierce lasting until nightfall, but indecisive. Both sides sustained considerable casualties; in the aftermath, the outnumbered Croesus withdrew across the Halys. The retreat of Croesus was a strategic decision to suspend operations using winter to his advantage, awaiting the arrival of reinforcements from his allies the Babylonians, the Egyptians and particularly the Spartans. Despite the arrival of winter, Cyrus continued his march on Sardis. The dispersal of Croesus' army exposed Lydia to the unexpected winter campaign of Cyrus, who almost immediately followed Croesus back to Sardis. The rival kings fought again at the Battle of Thymbra, before Sardis, which ended in a decisive victory for Cyrus the Great.

After the battle of Thymbra, the Lydians were driven within the walls of Sardis and put to siege by the victorious Cyrus. The city fell after the 14-day Siege of Sardis, reportedly by the Lydians' failure to garrison a part of the wall that they had thought to be unsusceptible to attack because of the steepness of the adjacent declivity of the ground.

Cyrus had issued orders for Croesus to be spared, and the latter was hauled a captive before his exulting foe. Cyrus' first intentions to burn Croesus alive on a pyre were soon diverted by the impulse of mercy for a fallen foe and, according to ancient versions, by divine intervention of Apollo, who caused a well-timed rainfall. Tradition represents the two kings as reconciled thereafter; Croesus succeeded in preventing the worst rigors of a sack by representing to his captor that it was Cyrus's, not Croesus's, property being plundered by the Persian soldiery.

The kingdom of Lydia came to an end with the fall of Sardis, and its subjection was confirmed in an unsuccessful revolt in the following year that was promptly crushed by Cyrus's lieutenants.

Croesus's territory, including the Greek cities of Ionia and Aeolis, was incorporated into Cyrus' already-powerful empire. That development brought Greece and Persia into conflict and culminated in the celebrated Persian wars of Cyrus' successors. Along with acquiring Ionia and Aeolis, Cyrus also had the Egyptian soldiers, who fought on behalf of the Lydians, voluntarily surrender and join his army.

Cyrus conquered the Kingdom of Media in 550 BC, which created conflict with the neighboring Lydian Kingdom. The Battle of Thymbra was the decisive battle in the war between Croesus of the Lydian Kingdom and Cyrus the Great of the Achaemenid Empire. Cyrus, after he had pursued Croesus into Lydia after the drawn Battle of Pteria, met the remains of Croesus' partially-disbanded army in battle on the plain north of Sardis in December 547 BC. Croesus' army was about twice as large and had been reinforced with many new men, but Cyrus still utterly defeated it. That proved to be decisive, and after the 14-day Siege of Sardis, the city and possibly its king fell, and Lydia was conquered by the Persians.

The Fall of Babylon denotes the end of the Neo-Babylonian Empire after it was conquered by the Achaemenid Empire in 539 BCE. Nabonidus (Nabû-na'id, 556–539 BCE), son of the Assyrian priestess Adda-Guppi, came to the throne in 556 BCE, after overthrowing the young king Labashi-Marduk. For long periods he entrusted rule to his son, prince and coregent Belshazzar, who was a capable soldier, but a poor politician. All of this left him somewhat unpopular with many of his subjects, particularly the priesthood and the military class.

To the east, the Achaemenid Empire had been growing in strength. In October 539 BCE, Cyrus the Great entered Babylonia in peace without being engaged in any battle. Babylonia was thereafter incorporated into the Persian Achaemenid realm as a satrapy.

The Hebrew Bible also unreservedly praises Cyrus for his actions in the conquest of Babylon, referring to him as Yahweh's anointed. He is credited with freeing the people of Judah from their exile and with authorizing the reconstruction of much of Jerusalem, including the Second Temple.

The Achaemenid conquest of the Indus Valley occurred from the 6th to 4th centuries BCE, and saw the Achaemenid Persian Empire take control of regions in the northwestern Indian subcontinent that predominantly comprise the territory of modern-day Pakistan. The first of two main invasions was conducted around 535 BCE by the empire's founder, Cyrus the Great, who annexed the regions west of the Indus River that formed the eastern border of the Achaemenid Empire. Following Cyrus' death, Darius the Great established his dynasty and began to re-conquer former provinces and further expand the empire. Around 518 BCE, Persian armies under Darius crossed the Himalayas into India to initiate a second period of conquest by annexing regions up to the Jhelum River in Punjab.

The first secure epigraphic evidence through the Behistun Inscription gives a date before or around 518 BCE. Achaemenid penetration into the Indian subcontinent occurred in stages, starting from northern parts of the Indus River and moving southward. The Indus Valley was formally incorporated into the Achaemenid Empire as the satrapies of Gandāra, Hindush, and Sattagydia, as mentioned in several Achaemenid-era Persian inscriptions.

Achaemenid rule over the Indus Valley decreased over successive rulers and formally ended around the time of the Macedonian conquest of Persia under Alexander the Great. This gave rise to independent kings such as Porus (ruler of the region between the Jhelum and Chenab rivers), Ambhi (ruler of the region between the Indus and Jhelum rivers with its capital at Taxila) as well as gaṇasaṅghas, or republics, which later confronted Alexander during his Indian campaign around 323 BCE. The Achaemenid Empire set a precedence of governance through the use of satrapies, which was further implemented by Alexander's Macedonian Empire, the Indo-Scythians, and the Kushan Empire.

The Battle of Pelusium was the first major battle between the Achaemenid Empire and Egypt. This decisive battle transferred the throne of the Pharaohs to Cambyses II of Persia, marking the beginning of the Achaemenid Twenty-seventh Dynasty of Egypt. It was fought near Pelusium, an important city in the eastern extremes of Egypt's Nile Delta, 30 km to the southeast of the modern Port Said, in 525 BC. The battle was preceded and followed by sieges at Gaza and Memphis.

The Scythian campaign of Darius I was a military expedition into parts of European Scythia by Darius I, the king of the Achaemenid Empire, in 513 BC. The Scythians were an East Iranian-speaking people who had invaded Media, revolted against Darius and threatened to disrupt trade between Central Asia and the shores of the Black Sea as they lived between the Danube and Don Rivers and the Black Sea. The campaigns took place in parts of what is now the Balkans, Ukraine, and southern Russia.

The Scythians managed to avoid a direct confrontation with the Persian army due to their mobile lifestyle and lack of any settlement (except Gelonus), while the Persians suffered losses due to the Scythians' scorched earth tactic. However, the Persians conquered much of their cultivated lands and damaged their allies, forcing the Scythians to respect the Persian force. Darius halted the advance to consolidate his gains, and built a defence line.

Ever since the Macedonian king Amyntas I surrendered his country to the Persians in about 512–511, Macedonians and Persians were strangers no more as well. The subjugation of Macedonia was part of Persian military operations initiated by Darius the Great (521–486) in 513—after immense preparations—a huge Achaemenid army invaded the Balkans and tried to defeat the European Scythians roaming to the north of the Danube river.

The Persian invasion led indirectly to Macedonia's rise in power and Persia had some common interests in the Balkans; with Persian aid, the Macedonians stood to gain much at the expense of some Balkan tribes such as the Paeonians and Greeks. All in all, the Macedonians were "willing and useful Persian allies. Macedonian soldiers fought against Athens and Sparta in Xerxes the Great's army. The Persians referred to both Greeks and Macedonians as Yauna ("Ionians", their term for "Greeks"), and to Macedonians specifically as Yaunã Takabara or "Greeks with hats that look like shields", possibly referring to the Macedonian kausia hat.

The Greco-Persian Wars (also often called the Persian Wars) were a series of conflicts between the Achaemenid Empire and Greek city-states that started in 499 BC and lasted until 449 BC. The collision between the fractious political world of the Greeks and the enormous empire of the Persians began when Cyrus the Great conquered the Greek-inhabited region of Ionia in 547 BC. Struggling to control the independent-minded cities of Ionia, the Persians appointed tyrants to rule each of them. This would prove to be the source of much trouble for the Greeks and Persians alike.

In 499 BC, the tyrant of Miletus, Aristagoras, embarked on an expedition to conquer the island of Naxos, with Persian support; however, the expedition was a debacle and, preempting his dismissal, Aristagoras incited all of Hellenic Asia Minor into rebellion against the Persians. This was the beginning of the Ionian Revolt, which would last until 493 BC, progressively drawing more regions of Asia Minor into the conflict. Aristagoras secured military support from Athens and Eretria, and in 498 BC these forces helped to capture and burn the Persian regional capital of Sardis. The Persian king Darius the Great vowed to have revenge on Athens and Eretria for this act. The revolt continued, with the two sides effectively stalemated throughout 497–495 BC. In 494 BC, the Persians regrouped and attacked the epicenter of the revolt in Miletus. At the Battle of Lade, the Ionians suffered a decisive defeat, and the rebellion collapsed, with the final members being stamped out the following year.

Seeking to secure his empire from further revolts and from the interference of the mainland Greeks, Darius embarked on a scheme to conquer Greece and to punish Athens and Eretria for the burning of Sardis. The first Persian invasion of Greece began in 492 BC, with the Persian general Mardonius successfully re-subjugating Thrace and Macedon before several mishaps forced an early end to the rest of the campaign. In 490 BC a second force was sent to Greece, this time across the Aegean Sea, under the command of Datis and Artaphernes. This expedition subjugated the Cyclades, before besieging, capturing and razing Eretria. However, while en route to attack Athens, the Persian force was decisively defeated by the Athenians at the Battle of Marathon, ending Persian efforts for the time being.

Darius then began to plan to completely conquer Greece but died in 486 BC and responsibility for the conquest passed to his son Xerxes. In 480 BC, Xerxes personally led the second Persian invasion of Greece with one of the largest ancient armies ever assembled. Victory over the allied Greek states at the famous Battle of Thermopylae allowed the Persians to torch an evacuated Athens and overrun most of Greece. However, while seeking to destroy the combined Greek fleet, the Persians suffered a severe defeat at the Battle of Salamis. The following year, the confederated Greeks went on the offensive, decisively defeating the Persian army at the Battle of Plataea, and ending the invasion of Greece by the Achaemenid Empire.

The allied Greeks followed up their success by destroying the rest of the Persian fleet at the Battle of Mycale, before expelling Persian garrisons from Sestos (479 BC) and Byzantium (478 BC). Following the Persian withdrawal from Europe and the Greek victory at Mycale, Macedon and the city-states of Ionia regained their independence. The actions of the general Pausanias at the siege of Byzantium alienated many of the Greek states from the Spartans, and the anti-Persian alliance was therefore reconstituted around Athenian leadership, called the Delian League. The Delian League continued to campaign against Persia for the next three decades, beginning with the expulsion of the remaining Persian garrisons from Europe. At the Battle of the Eurymedon in 466 BC, the League won a double victory that finally secured freedom for the cities of Ionia. However, the League's involvement in the Egyptian revolt by Inaros II against Artaxerxes I (from 460–454 BC) resulted in a disastrous Greek defeat, and further campaigning was suspended. A Greek fleet was sent to Cyprus in 451 BC, but achieved little, and, when it withdrew, the Greco-Persian Wars drew to a quiet end. Some historical sources suggest the end of hostilities was marked by a peace treaty between Athens and Persia, the Peace of Callias.

In 404 BCE, Darius fell ill and died in Babylon. At his death bed, Darius' Babylonian wife Parysatis pleaded with him to have her second eldest son Cyrus (the Younger) crowned, but Darius refused. Queen Parysatis favoured Cyrus more than her eldest son Artaxerxes II. Plutarch relates (probably on the authority of Ctesias) that the displaced Tissaphernes came to the new king on his coronation day to warn him that his younger brother Cyrus (the Younger) was preparing to assassinate him during the ceremony. Artaxerxes had Cyrus arrested and would have had him executed if their mother Parysatis had not intervened. Cyrus was then sent back as Satrap of Lydia, where he prepared an armed rebellion. Cyrus assembled a large army, including a contingent of Ten Thousand Greek mercenaries, and made his way deeper into Persia. The army of Cyrus was stopped by the royal Persian army of Artaxerxes II at Cunaxa in 401 BC, where Cyrus was killed. The Ten Thousand Greek Mercenaries including Xenophon were now deep in Persian territory and were at risk of attack. So they searched for others to offer their services to but eventually had to return to Greece.

The Corinthian War (395–387 BC) was a conflict in ancient Greece which pitted Sparta against a coalition of city-states comprising Thebes, Athens, Corinth and Argos, backed by the Achaemenid Empire. The war was caused by dissatisfaction with Spartan imperialism in the aftermath of the Peloponnesian War (431–404 BC), both from Athens, the defeated side in that conflict, and from Sparta's former allies, Corinth and Thebes, who had not been properly rewarded. Taking advantage of the fact that the Spartan king Agesilaus II was away campaigning in Asia against the Achaemenid Empire, Thebes, Athens, Corinth and Argos forged an alliance in 395 BC with the goal of ending Spartan hegemony over Greece; the allies' war council was located in Corinth, which gave its name to the war. By the end of the conflict, the allies had failed to end Spartan hegemony over Greece, although Sparta was durably weakened by the war.

At first, the Spartans achieved several successes in pitched battles (at Nemea and Coroneia), but lost their advantage after their fleet was destroyed at the naval Battle of Cnidus against the Persian fleet, which effectively ended Sparta's attempts to become a naval power. As a result, Athens launched several naval campaigns in the later years of the war, recapturing a number of islands that had been part of the original Delian League during the 5th century BC. Alarmed by these Athenian successes, the Persians stopped backing the allies and began supporting Sparta. This defection forced the allies to seek peace.

The King's Peace, also known as the Peace of Antalcidas, was dictated by the Achaemenid King Artaxerxes II in 387 BC, ending the war. This treaty declared that Persia would control all of Ionia, and that all other Greek cities would be "autonomous", in effect prohibiting them from forming leagues, alliances or coalitions. Sparta was to be the guardian of the peace, with the power to enforce its clauses. The effects of the war, therefore, were to establish Persia's ability to interfere successfully in Greek politics, to atomize and isolate from one another Greek city states, and to affirm Sparta's hegemonic position in the Greek political system. Thebes was the main loser of the war, as the Boeotian League was disbanded and their cities were garrisoned by Sparta. Peace did not last long: war between Sparta and a resentful Thebes resumed in 378 BC, which finally led to the destruction of Spartan hegemony at the Battle of Leuctra in 371.

The Great Satraps' Revolt, or the Revolt of the Satraps (366-360 BC), was a rebellion in the Achaemenid Empire of several satraps against the authority of the Great King Artaxerxes II Mnemon. The Satraps who revolted were Datames, Ariobarzanes and Orontes of Armenia. Mausolus the Dynast of Caria participated in the Revolt of the Satraps, both on his nominal sovereign Artaxerxes Mnemon's side and (briefly) against him.

They were supported by the pharaohs of Egypt, Nectanebo I, Teos, and Nectanebo II, to whom was sent Rheomithres who came back with 50 ships and 500 talents, and all joined forces against Artaxerxes II.

It was probably in 340 or 339 BC that Artaxerxes finally succeeded in conquering Egypt. After years of extensive and meticulous preparations, the King assembled and led in person a large host which included Greek mercenaries from Thebes, Argos, Asia Minor, and those commanded by the turncoat mercenary Mentor of Rhodes, as well as a war fleet and a number of transport ships. Although the Artaxerxes's army considerably outnumbered that of his Egyptian counterpart Nectanebo II, the difficulty of marching through the dry land south of Gaza and the many rivers of Upper Egypt still posed, as in previous invasions, a challenge, which was compounded, according to Diodorus Siculus, by the refusal of the Persians to make use of local guides. The invasion started poorly, as Artaxerxes lost some troops to quicksand at Barathra, and an attempt by his Theban troops to take Pelusium was successfully counterattacked by the garrison.

Artaxerxes then created three divisions of shock troops, each with a Greek commander and a Persian supervisor, while remaining himself in command of the reserves. One unit, to which he assigned the Thebans, a force of cavalry and Asiatic infantry, was tasked with taking Pelusium, while a second, commanded by Mentor of Rhodes and the eunuch Bagoas, was sent against Bubastis. The third division, which comprised the Argives, some unspecified elite troops and 80 triremes, was to establish a bridgehead on the opposite bank of the Nile. After an attempt to dislodge the Argives failed, Nectanebo retreated to Memphis, which prompted the besieged garrison of Pelusium to surrender. Bubastis likewise capitulated, as the Greek mercenaries in the garrison came to terms with the Persians after falling out with the Egyptians. This was followed by a wave of surrenders, which opened the Nile to Artaxerxes's fleet and caused Nectanebo to lose heart and abandon his country.

After this victory over the Egyptians, Artaxerxes had the city walls destroyed, started a reign of terror, and set about looting all the temples. Persia gained a significant amount of wealth from this looting. Artaxerxes also raised high taxes and attempted to weaken Egypt enough that it could never revolt against Persia. For the 10 years that Persia controlled Egypt, believers in the native religion were persecuted and sacred books were stolen. Before he returned to Persia, he appointed Pherendares as satrap of Egypt. With the wealth gained from his reconquering Egypt, Artaxerxes was able to amply reward his mercenaries. He then returned to his capital having successfully completed his invasion of Egypt.

Artaxerxes III was succeeded by Artaxerxes IV Arses, who before he could act was also poisoned by Bagoas. Bagoas is further said to have killed not only all Arses' children, but many of the other princes of the land. Bagoas then placed Darius III, a nephew of Artaxerxes IV, on the throne. Darius III, previously Satrap of Armenia, personally forced Bagoas to swallow poison. In 334 BC, when Darius was just succeeding in subduing Egypt again, Alexander and his battle-hardened troops invaded Asia Minor.

Alexander the Great (Alexander III of Macedon) defeated the Persian armies at Granicus (334 BC), followed by Issus (333 BC), and lastly at Gaugamela (331 BC). Afterwards, he marched on Susa and Persepolis which surrendered in early 330 BC. From Persepolis, Alexander headed north to Pasargadae, where he visited the tomb of Cyrus, the burial of the man whom he had heard of from the Cyropedia.

Darius III was taken prisoner by Bessus, his Bactrian satrap and kinsman. As Alexander approached, Bessus had his men murder Darius III and then declared himself Darius' successor, as Artaxerxes V, before retreating into Central Asia leaving Darius' body in the road to delay Alexander, who brought it to Persepolis for an honourable funeral. Bessus would then create a coalition of his forces, in order to create an army to defend against Alexander. Before Bessus could fully unite with his confederates at the eastern part of the empire, Alexander, fearing the danger of Bessus gaining control, found him, put him on trial in a Persian court under his control, and ordered his execution in a "cruel and barbarous manner."

Alexander generally kept the original Achaemenid administrative structure, leading some scholars to dub him as "the last of the Achaemenids". Upon Alexander's death in 323 BC, his empire was divided among his generals, the Diadochi, resulting in a number of smaller states. The largest of these, which held sway over the Iranian plateau, was the Seleucid Empire, ruled by Alexander's general Seleucus I Nicator. Native Iranian rule would be restored by the Parthians of northeastern Iran over the course of the 2nd century BC.

The Achaemenid Empire left a lasting impression on the heritage and cultural identity of Asia, Europe, and the Middle East, and influenced the development and structure of future empires. In fact, the Greeks, and later on the Romans, adopted the best features of the Persian method of governing an empire. The Persian model of governance was particularly formative in the expansion and maintenance of the Abbasid Caliphate, whose rule is widely considered the period of the 'Islamic Golden Age'. Like the ancient Persians, the Abbasid dynasty centered their vast empire in Mesopotamia (at the newly founded cities of Baghdad and Samarra, close to the historical site of Babylon), derived much of their support from Persian aristocracy and heavily incorporated the Persian language and architecture into Islamic culture. The Achaemenid Empire is noted in Western history as the antagonist of the Greek city-states during the Greco-Persian Wars and for the emancipation of the Jewish exiles in Babylon. The historical mark of the empire went far beyond its territorial and military influences and included cultural, social, technological and religious influences as well. For example, many Athenians adopted Achaemenid customs in their daily lives in a reciprocal cultural exchange, some being employed by or allied to the Persian kings. The impact of Cyrus's edict is mentioned in Judeo-Christian texts, and the empire was instrumental in the spread of Zoroastrianism as far east as China. The empire also set the tone for the politics, heritage and history of Iran (also known as Persia). Historian Arnold Toynbee regarded Abbasid society as a "reintegration" or "reincarnation" of Achaemenid society, as the synthesis of Persian, Turkic and Islamic modes of governance and knowledge allowed for the spread of Persianate culture over a wide swath of Eurasia through the Turkic-origin Seljuq, Ottoman, Safavid and Mughal empires.