The interaction between Hellenistic Greece and Buddhism started when Alexander the Great conquered Asia Minor and Central Asia in 334 BCE, going as far as the Indus, thus establishing direct contact with India, the birthplace of Buddhism.
Alexander founded several cities in his new territories in the areas of the Oxus and Bactria, and Greek settlements further extended to the Khyber Pass, Gandhara (see Taxila) and the Punjab. These regions correspond to a unique geographical passageway between the Himalayas and the Hindu Kush mountains, through which most of the interaction between India and Central Asia took place, generating intense cultural exchange and trade.
Following Alexander's death on June 10, 323 BCE, his Diadochi (generals) founded their own kingdoms in Asia Minor and Central Asia. General Seleucus set up the Seleucid Kingdom, which extended as far as India. Later, the Eastern part of the Seleucid Kingdom broke away to form the Greco-Bactrian Kingdom (3rd–2nd century BCE), followed by the Indo-Greek Kingdom (2nd–1st century BCE), and later still by the Kushan Empire (1st–3rd century CE). The interaction of Greek and Buddhist cultures operated over several centuries until it ended in the 5th century CE with the invasions of the White Huns, and later the expansion of Islam.
Some of the Edicts of Asoka describe the efforts made by Asoka to propagate the Buddhist faith throughout the Hellenistic world, which at that time formed an uninterrupted continuum from the borders of India to Greece. The Edicts indicate a clear understanding of the political organization in Hellenistic territories: the names and location of the main Greek monarchs of the time are identified, and they are claimed as recipients of Buddhist proselytism: Antiochus II Theos of the Seleucid Kingdom (261–246 BCE), Ptolemy II Philadelphos of Egypt (285–247 B.C.), Antigonus Gonatas of Macedonia (276–239 BCE), Magas of Cyrene (288–258 BCE), and Alexander of Epirus (272–255 BCE). "The conquest by Dharma has been won here, on the borders, and even six hundred yojanas (4,000 miles) away, where the Greek king Antiochos rules, beyond there where the four kings named Ptolemy, Antigonos, Magas and Alexander rule, likewise in the south among the Cholas, the Pandyas, and as far as Tamraparni." (Edicts of Asoka, 13th Rock Edict, S. Dhammika)
Furthermore, according to Pali sources, some of Asoka's emissaries were Greek Buddhist monks, indicating close religious exchanges between the two cultures:
"When the elder Moggaliputta, the illuminator of the religion of the Conqueror (Asoka), had brought the third council to an end (...) he sent forth elders, one here and one there: ... and to Aparantaka (the "Western countries" corresponding to Gujarat and Sindh) he sent the Greek (Yona) named Dhammarakkhita." (Mahavamsa XII). It is not clear how much these interactions may have been influential, but some authors have commented that some level of syncretism between Hellenist thought and Buddhism may have started in Hellenic lands at that time. They have pointed to the presence of Buddhist communities in the Hellenistic world around that period, in particular in Alexandria (mentioned by Clement of Alexandria), and to the pre-Christian monastic order of the Therapeutae (possibly a deformation of the Pali word "Theravada"), who may have "almost entirely drawn (its) inspiration from the teaching and practices of Buddhist ascetism" (Robert Lissen).
From around 100 BCE, "star within a diadem" symbols, also alternatively described as "eight-spoked wheels" and possibly infuenced by the design of the Buddhist Dharma wheel, appear on the coinage of the Hebrew King Alexander Jannaeus (103-76 BCE). Alexander Jannaeus was associated with the phil-Hellenic sect of the Sadducees and the monastic order of the Essenes, themselves precursors of Christianity. These representations of eight-spoked wheels continued under the reign of his widow, Queen Alexandra, until the Roman invasion of Judea in 63 BCE.
Buddhist gravestones from the Ptolemaic period have also been found in Alexandria, decorated with depictions of the Dharma wheel (Tarn, "The Greeks in Bactria and India"). Commenting on the presence of Buddhists in Alexandria, some scholars have even pointed out that “It was later in this very place that some of the most active centers of Christianity were established” (Robert Linssen, Zen Living).
In the areas west of the Indian subcontinent, neighboring Greek kingdoms had been in place in Bactria (today's northern Afghanistan) since the time of the conquests of Alexander the Great around 326 BCE: first the Seleucids from around 323 BCE, then the Greco-Bactrian kingdom from around 250 BCE.
The Greco-Bactrian king Demetrius I invaded India in 180 BCE as far as Pataliputra, establishing an Indo-Greek kingdom that was to last in various part of northern India until the end of the 1st century BCE. Buddhism flourished under the Indo-Greek kings, and it has been suggested that their invasion of India was intended to show their support for the Mauryan empire, and to protect the Buddhist faith from the religious persecutions of the Sungas (185–73 BCE).
One of the most famous Indo-Greek kings is Menander (reigned c. 160–135 BCE). He apparently converted to Buddhism and is presented in the Mahayana tradition as one of the great benefactors of the faith, on a par with king Asoka or the later Kushan king Kanishka. Menander's coins bear the mention "Saviour king" in Greek, and "Great king of the Dharma" in Kharoshthi script. Direct cultural exchange is suggested by the dialogue of the Milinda Panha between the Greek king Menander and the monk Nagasena around 160 BCE. Upon his death, the honour of sharing his remains was claimed by the cities under his rule, and they were enshrined in stupas, in a parallel with the historic Buddha (Plutarch, Praec. reip. ger. 28, 6).
The interaction between Greek and Buddhist cultures may have had some influence on the evolution of Mahayana, as the faith developed its sophisticated philosophical approach and a man-god treatment of the Buddha somewhat reminiscent of Hellenic gods. It is also around that time that the first anthropomorphic representations of the Buddha are found, often in realistic Greco-Buddhist style: "One might regard the classical influence as including the general idea of representing a man-god in this purely human form, which was of course well familiar in the West, and it is very likely that the example of westerner's treatment of their gods was indeed an important factor in the innovation" (Boardman, "The Diffusion of Classical Art in Antiquity").