The ruling dynasty of the Persians settled in Fars in southwestern Iran (possibly the Parsumash of the later Assyrian records) traced its ancestry back to an eponymous ancestor, Haxamanish, or Achaemenes. There is no historical evidence of such a king's existence. Traditionally, three rulers fall between Achaemenes and Cyrus II: Teispes, Cyrus I, and Cambyses I. Teispes, freed of Median domination during the so-called Scythian interregnum, is thought to have expanded his kingdom and to have divided it on his death between his two sons, Cyrus I and Ariaramnes. Cyrus I may have been the king of Persia who appears in the records of Ashurbanipal swearing allegiance to Assyria after the devastation of Elam in the campaigns of 642-639 BC, though there are chronological problems involved with this equation. When Median control over the Persians was supposedly reasserted under Cyaxares, Cambyses I is thought to have been given a reunited Persia to administer as a Median vassal. His son, Cyrus II, married the daughter of Astyages and in 559 BC inherited his father's position within the Median confederation. Cyrus II certainly warranted his later title, Cyrus the Great. He must have been a remarkable personality, and certainly he was a remarkable king. He united under his authority several Persian and Iranian groups who apparently had not been under his father's control. He then initiated diplomatic exchanges with Nabonidus of Babylon (556-539 BC), which justifiably worried Astyages. Eventually, he openly rebelled against the Medes, who were beaten in battle when considerable numbers of Median troops deserted to the Persian standard. Thus, in 550 BC, the Median Empire became the first Persian Empire, and the Achaemenid kings appeared on the international scene with a suddenness that must have frightened many.

Cyrus immediately set out to expand his conquests. After apparently convincing the Babylonians that they had nothing to fear from Persia, he turned against the Lydians under the rule of the fabulously wealthy Croesus. Lydian appeals to Babylon were to no avail. He then took Cilicia, thus cutting the routes over which any help might have reached the Lydians. Croesus attacked and an indecisive battle was fought in 547 BC on the Halys River. Since it was late in the campaigning season, the Lydians thought the war was over for that year, returned to their capital at Sardis, and dispersed the national levy. Cyrus, however, kept coming. He caught and besieged the Lydians in the citadel at Sardis and captured Croesus in 546 BC. Of the Greek city-states along the western coast of Asia Minor, heretofore under Lydian control, only Miletus surrendered without a fight. The others were systematically reduced by the Persian armies led by subordinate generals. Cyrus himself was apparently busy elsewhere, possibly in the east, for little is known of his activities between the capture of Sardis and the beginning of the Babylonian campaign in 540 BC.

Nowhere did Cyrus display his political and military genius better than in the conquest of Babylon. The campaign actually began when he lulled the Babylonians into inactivity during his war with Lydia, which, since it was carried to a successful conclusion, deprived the Babylonians of a potential ally when their turn came. Then he took maximum advantage of internal disaffection and discontent within Babylon. Nabonidus was not a popular king. He had paid too little attention to home affairs and had alienated the native Babylonian priesthood. Second Isaiah, speaking for many of the captive Jews in Babylon, was undoubtedly not the only one of Nabonidus' subjects who looked to Cyrus as a potential deliverer. With the stage thus set, the military campaign against Babylon came almost as an anticlimax. The fall of the greatest city in the Middle East was swift; Cyrus marched into town in the late summer of 539 BC, seized the hands of the statue of the city god Marduk as a signal of his willingness to rule as a Babylonian and not as a foreign conquerer, and was hailed by many as the legitimate successor to the throne. In one stride Cyrus carried Persian power to the borders of Egypt, for with Babylon came all that it had seized from the Assyrians and had gained in the sequel.

Little is known of the remainder of Cyrus' reign. The rapidity with which his son and successor, Cambyses II, initiated a successful campaign against Egypt suggests that preparations for such an attack were well advanced under Cyrus. But the founder of Persian power was forced to turn east late in his reign to protect that frontier against warlike tribes who were themselves in part Iranians and who threatened the plateau in the same manner as had the Medes and the Persians more than a millennium earlier. One of the recurrent themes of Iranian history is the threat of peoples from the east. How much Cyrus conquered in the east is uncertain. What is clear is that he lost his life in 529 BC, fighting somewhere in the region of the Oxus and Jaxartes rivers.