History of Vajrayana is engulfed in ambiguities. Scholars believe that it got its origin from India, while there are several other scholars who opine that Vajrayana has its roots in Bengal. There are still others who are of the view that it originated in Pakistan or South India. As per the Tibetan Buddhism, Buddha himself taught tantra. However, these were secret teachings and they were written much later than his other teachings. The teachings on tantra are known as sutras. The earliest references to these are to be found in a fourth century Buddhist text. The major centre for the development of Vajrayana was the Nalanda University, which till the eleventh century India was the leading the Vajrayana practices. However, by the thirteenth century Vajrayana died out in India. Padmasambhava, an Indian Vajrayana master, travelled to Tibet and Bhutan to take Vajrayana to these countries. After this the Nyingma School was established here. In the eleventh and the twelfth centuries another important diffusion took place with several other forms and gave rise to new schools of Tibetan Buddhism, such as, Sakyapa, Gelukpa, Kagyupa, and Kadampa.

Vajrayana established itself in the seventh century in China and was officially recognized by the Tang Dynasty. Changan or the present day Xian was then an important centre for Buddhist studies as well as for Vajrayana practices. Vajrayana spread to Japan from China. On Emperor Kammu`s initiative monk Kukai went to the Tang Dynasty and learnt all about the tantric studies in Buddhism. He then created his own version and thus the Shingon school of Buddhism was founded. This school exists even today. Countries like Mongolia and the Malay Archipelago were also influenced by Vajrayana. However with the downfall of Yuan Dynasty Vajrayana lost its significance in the Far East countries like China and Mongolia. In the seventeenth century it was revived in Mongolia as the emperor had good relations with Dalai Lama. Vajrayana is still practiced in the Far East countries but as a folk art.

Vajrayana Buddhism is also called Esoteric Buddhism, Tantric Buddhism, Mantrayana, Tantrayana, Secret Mantra and the Diamond Vehicle. The phase of Vajrayana Buddhism has been sorted as the fifth or the final phase of Indian Buddhism. Vajrayana is a multifaceted and a complex system which developed over several centuries and brings out several inconsistencies and an assortment of opinions. Vajrayana likely got its form in the sixth or the seventh century CE, and the very term `Vajrayana` first introduced in the eighth century CE. The scriptures of Vajrayana are known as Tantras. The peculiar feature of Vajrayana Buddhism is ritual, which acts as an alternative or a substitute for the old abstract meditations. The scriptures of Vajrayana tell that Vajrayana relates to one of three paths leading to enlightenment, while the other two paths are Hinayana and Mahayana Buddhism.

Views are also different as far as the history of Vajrayana in Indian sub-continent is concerned. Few believe that Vajrayana had its origin in Bengal, which is presently divided between the Indian Republic and Bangladesh. There are several others who claim that Vajrayana originated in Uddiyana, located by few scholars in the present day Swat Valley, situated in Pakistan, or in the southern parts of India. In the tradition of Tibetan Buddhists, it is believed that the Shakyamuni Buddha taught tantra, since the teachings are secret, was confined to the guru and the disciple relationship, and was written down long after the other teachings of Lord Buddha; the Mahayana sutras and the Pali Canon.

The most former texts came out in the earlier parts of the forth century. The Nalanda University in the eastern parts of India became a favourable destination for the growth and development of Vajrayana theory, though it is probable that the university followed the early Tantric movement. Vajrayana Buddhism almost died out in India in the thirteenth century and tantric religions of Hinduism and Buddhism were also getting pressure from the intruding Islamic armies. By that period, a large segment of the practices were there in Tibet, where they were upheld till date.

During the later half of twentieth century, a substantial quantity of Tibetan exiles took flight from the anti-religious, oppressive rule of the Communist rulers of China in order to found Tibetan Buddhist communities in India`s northern part, mainly around Dharamsala. These Tibetan Buddhists settled in and around Dharamsala remained in India and all over the world the major practitioners of Tantric Buddhism.

The oldest king of Sambalpur in the Indian state of Orissa was Indrabhuti who founded Vajrayana and his sister founded Sahajayana. His sister was the wife of Yuvaraja Jalendra of Lankapuri or Suvarnapur. Thus, Buddhism`s new tantric cults introduced Mudra, Mantra and Mandala together with a list of six tantric Abhicharas or practices like; Stambhana, Marana, Sammohana, Uchchatana Vidvesan and Vajikarana. Tantric Buddhist sects worked hard to uplift the self-respect of the lowest of the society to a much higher platform. It re-energized the old practices and beliefs, a less formal and simpler approach to the personal god, a respectful and liberal attitude to women, and the rejection of caste system.

Starting from the seventh century A.D., a number of famous religious elements of mixed nature were integrated into Mahayana Buddhism which ultimately resulted in the inception of Vajrayana, Sahajayana and Kalachakrayana tantric Buddhism. Tantric Buddhism had its origin in Uddiyana, a country divided into two kingdoms called Lankapuri and Sambhala. Sambhala is identified with Sambalpur and Lankapuri is identified with Suvarnapura or Sonepur. Several renowned Vajrayana Acharyas like Hadipa, Tantipa, Sarah, Heruka, Dombi and Luipa were from the supposed lower classes. The cult exercised a significant influence over the oppressed classes of Sambalpur-Bolangir region. In the ninth and the tenth century A.D. there came into existence seven renowned Tantric maidens at Patna or Patnagarh region then known as Kuanri-Patana. These renowned maidens are famously called Satvaheni or Seven sisters. They were from the lower castes of society and followed Lakshminkara. Due to their providential feats and power, were later deified and prayed by the folk people.