It was the Eastern Afghanistan and also comprised of Taxila, Kashmir and northwestern areas. Taxila was its capital. The king of this state was Pumukashali. He was contemporary of lord Buddha.

The Gandhara kingdom comprised of the Gandharas who were highly trained in the art of war and they have a mention in the Atharva Veda as well. Though in the Vedas they are mentioned as the despised people along with some others due to their allegiance to non-Aryan group. Puranic and Buddhist tradition included Gandharas in Uttarapatha. The Gandhara kingdom of the sixteen mahajanapadas was founded by Gandhara, son of Aruddha who was the son of Yayati. It was also believed once according to Gandhara Jatakas that they were a part of Kashmir. Gandhara was an important seat of international commercial activities, and provided communication with other countries like Iran and Central Asia.