Lord Rama was undoubtedly the greatest king of Ayodhya. In his time Ayodhya steps out full-grown as the capital of whole of India. It became the centre of great cultural activity. Rama had a long, prosperous and peaceful reign. He indeed had decorated Ayodhya with beautiful temples, and buildings. The significance of Ayodhya today is chiefly due to the fact that it has been hallowed by the association of Rama.
Although after Rama`s time, Ayodhya plays no important part in traditional history, it has always remained a great centre of great cultural activities. Later Ayodhya become a part of the kingdom of Koshala which played an important role, in the Buddhist period. It appears from the Buddhist account that the Koshala kings had their capitals at Saketa Ayodhya was the earliest capital followed by Saketa, and Goddess Sraswati was the last. Goddess Sraswati has been identified with Saket-Mahet, on the south bank of the Raption the borders of the Gonda and Baharaich districts in Uttar Pradesh. In Lord Buddha`s time, Ayodhya had sunk into comparative insignificance but the other two figured among the six great cities of India. The Mahaparinibban sutta mentions Champa, Rajgriha, Srasvati. Saketa, Kausambi and Varanasi as six metropolises in India and adjoins that they are inhabited by wealthy Brahmins, Kshatriyas and Vaishyas who are disciples of the Tathagata.
It appears that Ayodhya is different from the famous city of Saket, and was not very much influenced by Buddhism. Jainism is closely associated with Ayodhya. The founder of Jainism, Adinath, and four of the twenty four tirthankaras were born at Ayodhya. It would consequently appear that this religion was established here long ago. There are several Jain temples at Ayodhya though none of them of any great antiquity.
From the 7th century A.D. for a long period Ayodhya had receded in the back ground and comes in the forefront with the advent of the Muslims in India. It attracted the attention of the invaders on account of its being a centre of Hinduism. Its desecration by Babar and Aurangzeb cast a gloom over the gay city. The presence of a Mohammadan governor and his court kept the Hindu shrines continually in the back ground. Ayodhya was a mint-town of Akbar and also of Muhammad Shah, some `dams` of the latter being inscribed "Akhtarnagar Avadh". The Hindus heaved a sigh of relief when the court was removed to the new city of Faizabad.