Sarnath is where the historical Buddha, Siddhārtha Gautama (ca. 563–ca. 483 BC) first taught the Buddhist dharma. In 528 BC, about five weeks after having attained enlightenment at Bodh Gaya, he came to Sarnath and preached his first sermon (now called Dharma Chakra Pravartan, or Set in Motion the Wheel of Law) in what is today Sarnath's Deer Park.

Legend has it that the Buddha was incarnated as King of the Deer in the deer park—the name "Sarnath" comes from Saranganath, which means "Lord of the Deer." In the Deer Park you can buy some carrots for a few rupees and feed the current denizens.

When the Buddha arrived at Sarnath, he revealed his Eightfold Path, which is meant to lead to the end of sorrow and the attainment of enlightenment. Three hundred years later, in the 3rd century BC, the great Mauryan emperor Ashoka arrived in the area; he was a convert to Buddhism and had made it the state religion. In Sarnath he had several stupas (large, mound-shape reliquary shrines) built, along with a pillar with a lion capital that was adopted by independent India as its national emblem—it's called the Ashoka pillar. The wheel motif under the lions' feet represents the dharma chakra, the wheel (chakra) of Buddhist teaching (dharma), which began in Sarnath. The chakra is replicated at the center of the Indian national flag.

Sarnath reached its zenith by the 4th century AD, under the Gupta dynasty, and was occupied into the 9th century, when Buddhist influence in India began to wane. By the 12th century Sarnath had more or less fallen to Muslim invaders and begun a long decay. In 1836 Sir Alexander Cunningham started extensive excavations here, uncovering first a stone slab with an inscription of the Buddhist creed, then numerous other relics. It was then that the Western world realized that the Buddha had been an actual person, not a mythical figure. Most of the sites are in a well-manicured park behind a gate (admission is Rs. 100).

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