The early history of Ujjain is lost in the midst of antiquity. As early as the time of the Aryan settlers, Ujjain seems to have acquired importance. By the 6th century B.C. Avanti with its capital at Ujjaini, is mentioned in Buddhist literature as one of the four great powers along with Vatsa, Kosala and Magadha.
Ujjain lay on the main trade route between North India and Deccan going from Mathura via Ujjain to Mahismati (Maheshwar) on the Narmada, and on to Paithan on the Godavari, western Asia and the West. The Northern black polished ware - the NBP as it is often called which is technically the finest pottery of the time, with a brilliantly burnished dressing almost of the quality of a glaze in colour from jet black to a deep grey or metallic blue and iron, found their way to the northern Deccan from the Gangetic plains through Ujjain. The articles of export to the western Asia such as precious stones and pearls, scents and spices, perfumes, silks and muslin, reached the port of Brighukachcha from the remote north through Ujjain. All this finds a detailed and interesting deion in the Periplus of the Erythrean Sea

An account of an unknown Greek merchant who made a voyage to India in the second half of the first century AD. The Periplus talks of a city called Ozene to the east of Barygaza (Broach) which fed all commodities to trade like onyx, porcelain, fine muslin and quantities of ordinary cottons, spikenard , costus bodellium to this important port and to other parts of India.
The earliest known epigraphic record of the Paramaras, the Harsola Granth, issued at the beginning of the 10th century AD, maintains that the kings of the Paramara dynasty were born in the family of the Rastrakutas in the Deccan The early Paramara chiefs of Malwa were probably vassals of the Rastrakutas. The Udaypur Prasati, mentions Vakpati Vakpati I as the king of Avanti and it was probably in his region that the Rastrakuta Indra III halted at Ujjain while advancing with his army against the Pratihara Mahipala I. Malwa was lost in the time of Vakpati's successor, Vairisimha II, to the invading forces of Mahipala I who avenged his defeat at the hands of Indra III by invading the empire of Rastrakuta. Mahipala and his Kalachuri confederate Bhamanadeva are said to have conquered the territory up to the banks of the Narmada including Ujjain and Dhar. The Paramara sovereignty in the Malwa ceased until AD 946 when Vairsimha II became dominant in the area. It is in his son Siyaka II's reign that the independent Paramara rule in Malwa began. It is believed that it was this time that the capital was shifted to the area of the Mahakala Vana in Ujjain.