After Alexander's death in 323 BCE, the unity of the Macedonian empire soon crumbled. The satraps appointed by Alexander to govern the provinces fought for dominance, with Seleucus Nicator, a Macedonian noble, emerging victorious in the eastern half of the empire in 312 BCE. Seleucus seized Babylonia from Alexander's successor, Antigonus I, and over the next fifty years the Seleucids expanded their realm west to Syria, and north to Thrace, and east to the Indus River valley. This was the Seleucid heyday, and it was short-lived; by the mid-third century the empire had begun to lose control over its most far-flung territories. Seleucus lived to see the forfeiture of the Indus region to Mauryan control (it is said he traded the Indus Valley for five hundred elephants), and by around 250 BCE the Greco-Macedonian colony of Bactria in northern Afghanistan had formed an independent kingdom. By approximately 190 BCE the Seleucid Empire consisted of Syria, Mesopotamia and most of the Iranian plateau.

The Seleucid aristocracy maintained its Greco-Macedonian heritage throughout their period of political dominance in the Middle East. Greek became the language of commerce among traders who made traveled between the Mauryan Empire, the oasis cities of Central Asian such as of Merv and Bactria, and the Seleucid urban centers. Yet though Seleucus I and his successors actively promoted Greek culture and language, local populations resisted their efforts, and maintained their own customs. At times, Seleucid attempts to force local communities into adopting Greek cultural heritage met with disaster, as demonstrated by the Maccabean uprising in 165 BCE, inspired by the raising of a statue of Zeus in a Jerusalem temple. When Greco-Macedonian immigration began to slow down by the mid-second century BCE, local languages and customs once again became dominant, reversing the progress made by the Seleucid rulers to Hellenize Asia.

Strategic control of the mountain passes and roads connecting the West with the East allowed the Seleucids to dominate overland trade between the Mediterranean and Asia. Economic ties with Central Asia kingdoms and Mauryan India were developed, and urban regions on either end of the Seleucid Empire became important centers for trade and cultural exchange. Proximity to the Central Asia also had its disadvantages, for the provinces in the northeast occasionally suffered raids by nomadic horseman. In response, Antiochus I built a wall nearly one hundred miles in length to protect the city of Merv, a solution strongly reminiscent of China's Great Wall, constructed for identical purposes.

In 190 BCE the Seleucids had met their first military defeat at the hands of the Romans, allowing Rome to seize of much of Anatolia. The Maccabean uprising in 164 BCE resulted in the loss of Judea in Palestine, while most of the Empire's eastern provinces had reorganized themselves into independent kingdoms by the year 141 BCE. Over the next few decades the Seleucids (now more of a kingdom than an empire) managed to shore up control of the last of their territories and held them until the year 64 BCE, when they were absorbed by the Roman Empire.