The Babylonians began their rise to power in the region of Mesopotamia around 1900 B.C. This was at a time when Mesopotamia was largely unstable, prone to conflict and invasion, and not at all unified. This early period, known as the Old Babylonian Period, is characterized by over 300 years of rule of the Amorites, who had come from west of the Euphrates River, and formed an empire based in the city-state of Babylon. This empire was a monarchy that had conquered the outer Amorite territories and united them into one kingdom.
The Babylonian empire thrived on an economy of trade with the city-states west of the Euphrates. And under the strict rule of Hammurabi, the city of Babylon became the political and religious capital of the entire empire, sometime around 1750 B.C. King Hammurabi ran a tight ship, with his famous code of laws providing a steady environment where taxes were collected and affairs were run quite efficiently.
Babylonia was quite successful at taking control of nearby city-states, thanks to its strong and disciplined army. Its influence was felt far and wide, as far away as the eastern Mediterranean regions. This phase of the Babylonian empire ended after a century and a half of thriving economy and cultural stimulus, when the city of Babylon fell to the Hittites in 1595 B.C.
Though Babylon was invaded by Hittite forces led by King Mursilis I, it remained capital of the foreign-led empire that replaced the former glory of the Babylonians. The Kassites of Iran, led by Gandash of Mari, came in and took over rule, renaming the city Kar-Duniash. For nearly 600 years this faction ruled over the western parts of Asia, and Babylon was considered its holy city, during this time known as the Kassite Period. Elsewhere in Mesopotamia, the Assyrians continued to dominate.
There was a relatively peaceful coexistence between the Assyrians and Babylonians, if only because the Assyrians gave Babylonia the margin to enjoy quite a bit of power. When Babylonia felt its power and privileges were being strangled, they often attempted rebellion.
When the last Assyrian king Ashurbanipal died in 627 B.C., the Babylonians, under the influence of Nabopolassar the Chaldean, succeeded in rebelling. The Assyrian city of Nineveh was taken in 612 B.C., and Babylonia was gain in control of the entire region. It was the nearly half-century rule of Nabopolassar's son Nebudchadnezzar that again cemented Babylon as the center of the substantial Babylonian empire. This period of Babylonian history was known as the Chaldean Era of the Neo-Babylonian Empire.
In 539 B.C., Persian king Cyrus mounted an invasion against the Babylonians. One of his first acts as the self-proclaimed successor of the Babylonian kings was to let the exiled Jews return to their homeland. Cyrus transferred power to his son Cambyses in 529 B.C., and died the following year. After several years of political instability, Babylon partially fell in 514 B.C., and the city fell into ruin.