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The Greco-Bactrian Kingdom was founded when Diodotus I, the satrap of Bactria (and probably the surrounding provinces) seceded from the Seleucid Empire around 250 BC.

The preserved ancient sources (see below) are somewhat contradictory and the exact date of Bactrian independence has not been settled. The new kingdom, highly urbanized and considered as one of the richest of the Orient (opulentissimum illud mille urbium Bactrianum imperium "The extremely prosperous Bactrian empire of the thousand cities" Justin, XLI,1The Greeks who caused Bactria to revolt grew so powerful on account of the fertility of the country that they became masters, not only of Ariana, but also of India, as Apollodorus of Artemita says: and more tribes were subdued by them than by Alexander...

Alexander had also established several colonies in neighbouring Bactria, such as Alexandria on the Oxus (modern Ai-Khanoum) and Alexandria of the Caucasus (medieval Kapisa, modern Bagram).

After Alexander's death in 323 BC, Bactria came under the control of Seleucus I Nicator, who founded the Seleucid Empire.

Diodotus was succeeded by his son Diodotus II, who allied himself with the Parthian Arsaces in his fight against Seleucus II: Soon after, relieved by the death of Diodotus, Arsaces made peace and concluded an alliance with his son, also by the name of Diodotus; some time later he fought against Seleucos who came to punish the rebels, and he prevailed: the Parthians celebrated this day as the one that marked the beginning of their freedom and possibly satrap of Sogdiana, overthrew Diodotus II around 230 BC and started his own dynasty.

Euthydemus's control extended to Sogdiana, going beyond the city of Alexandria Eschate founded by Alexander the Great in Ferghana: "And they also held Sogdiana, situated above Bactriana towards the east between the Oxus River, which forms the boundary between the Bactrians and the Sogdians, and the Iaxartes River.

When the ruler of neighbouring Parthia, the former satrap and self-proclaimed king Andragoras, was eliminated by Arsaces, the rise of the Parthian Empire cut off the Greco-Bactrians from direct contact with the Greek world.

Overland trade continued at a reduced rate, while sea trade between Greek Egypt and Bactria developed.

The most famous Indo-Greek ruler was Menander (Milinda).

And the Iaxartes forms also the boundary between the Sogdians and the nomads. He then successfully resisted a three-year siege in the fortified city of Bactra (modern Balkh), before Antiochus finally decided to recognize the new ruler, and to offer one of his daughters to Euthydemus's son Demetrius around 206 BC.

Classical accounts also relate that Euthydemus negotiated peace with Antiochus III by suggesting that he deserved credit for overthrowing the original rebel Diodotus, and that he was protecting Central Asia from nomadic invasions thanks to his defensive efforts: ..if he did not yield to this demand, neither of them would be safe: seeing that great hordes of Nomads were close at hand, who were a danger to both; and that if they admitted them into the country, it would certainly be utterly barbarised.

during the last two centuries BC and was ruled by more than thirty kings, often conflicting with one another.

The kingdom was founded when the Graeco-Bactrian king Demetrius invaded the subcontinent early in the 2nd century BC.

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