"He laid out (...) four suburbs as well as the Abhaya-tank, the common cemetery, the place of execution, and the chapel of the Queens of the West, the banyan-tree of Vessavana and the Palmyra-palm of the Demon of Maladies, the ground set apart for the Yonas and the house of the Great Sacrifice; all these he laid out near the west gate." Mahavamsa X, trans. Wilhelm Geiger

"A hermitage was made for many ascetics; eastward of that same cemetery the ruler built a house for the nigantha Jotiya.(...) On the further side of Jotiya's house and on this side of the Gamani tank he likewise built a monastery for wandering mendicant monks, and a dwelling for the ajivakas and a residence for the brahmans, and in this place and that he built a lying-in shelter and a hall for those recovering from sickness." Mahavamsa X, trans. Wilhelm Geiger

It is said that King Pandukabhaya made it his capital in the 4th century BC, and that he also laid out the town and its suburbs according to a well organised plan. He constructed a reservoir named Abhayavapi. He established shrines for yakkhas such as Kalawela and Cittaraja. He housed the Yaksini-Cetiya in the form of a mare within the royal precincts and offerings were made to all these demi-gods every year. He chose the sites for the cemetery and for the place of execution, the Chapel of the Western Queen, the Pacchimarajini, the Vessavana Banyan Tree, the Palm of the Vyadhadeva, the Yona Quarter and the House of the Great Sacrifice. The slaves or Candalas were assigned their duties and a village was set apart for them. They build dwellings for Niganthas, for wandering ascetics and for Ajivakas and Brahmanas. He established, the village boundaries. The tradition that King Pandukabhaya made Anuradhapura the capital city of Sri Lanka as early as the fourth century BC had been very important.

The administrative and sanitary arrangements be made for the city and the shrines he provided indicate that over the years the city developed according to an original master plan. His son Mutasiva, succeeded to the throne. During his reign of sixty years, he maintained Anuradhapura as his capital and further laid out the Mahameghavana Garden which was to play an important role in the early history of Buddhism in Sri Lanka. It was in the period of his successor, his son Devanam piya Tissa, that Buddhism was first introduced this island 236 years after the passing away of the Buddha. Emperor Ashoka in India was a contemporary of Devanam piya Tissa. Historically this period is considered to extend from 250 to 210 BC. This is the point at which a kingship began and a civilization developed based on one of the greatest religions of South Asia, Buddhism.

The great building era was when vast monastery complexes and some of the tallest buildings in the ancient world were built. The Jetavanaramaya dagoba of the city is still the highest brick structure in the world.

The Maha Vihara was centered around the orthodox Theravadins. This was founded by King Devanampiya Tissa in 249 BC. The heterdox Mahayanists founded the Abhayagiri Vihara. King Mahasena (275-310 BC) built the Jetavanaramaya located in between the Maha Vihara and the Abhayagiri Monasteries.

In the suburbs of the city major monasteries with their gigantic stupas were constructed, The Maha Thupa, the Bodhi Tree and Thuparama of the Maha Vihara stood to the south of the city. The Abhayagiri to the north, the Pubbarama to the east, the Tanovana to the north-west and the Jetavanaramaya to the south-east.

The Sacred Tooth Relic was brought to the city in the reign of King Kirtisri Meghavana. The relic was deposited in a building named Dhammacakka. Since then annually it was carried in a procession to the Abhayagiri monastery after which an exposition was held.

The city's popularity grew both as a ritual centre and as the administrative centre, a large population was attracted to the city for permanent settlement. Thus the living facilities were improved to accommodate the expanding population. King Vasabha constructed many ponds which were fed by a network of subterranean channels which were constructed to supply water to the city. Tissa and Abhayavapi tanks were built, the Nuwara weva was built and the Malwatu Oya was dammed to build the Maccaduwa wewa which was 4408 acres (17.84 km²) in size.

Large lakes were also constructed by the city's rulers to irrigate paddy lands and also to supply water to the city. Nuwara wewa and Tissa wewa are among the best known lakes in the city.

Anuradhapura attained its highest magnificence about the commencement of the Christian era. In its prime it ranked beside Nineveh and Babylon in its colossal proportions—its four walls, each 16 miles (26 km) long, enclosing an area of 256 square miles (663 km²) —in the number of its inhabitants, and the splendour of its shrines and public edifices. The city also had some of the most complex irrigation systems of the ancient world, situated in the dry zone of the country the administration built many tanks to irrigate the land. Most of these tanks still survive. To date, it is believed that some of these tanks are the oldest surviving reservoirs in the world today.

The city was the capital of the country continuously from the 5th century BC to AD 1017. Its decline began with continuous wars with the invading South Indians which made the kingdom economically poor. The city was sacked by a Chola invasion forces in 1017 and the governing capital was shifted to the relative safety of Polonnaruwa. The destruction caused to the city and its complex irrigation system was so great that the city was totally abandoned, and fell into decay for nearly a thousand years.

It was not until the 19th century that the jungle was cleared away, the ruins laid bare, and some measure of prosperity brought back to the surrounding country by the restoration of hundreds of village tanks by the British.

The ruins consist of three classes of buildings, dagobas, monastic buildings, and pokunas. The dagobas are bell-shaped masses of masonry, varying from a few feet to over 1100 ft (340 m) in circumference. Some of them contain enough masonry to build a town for twenty-five thousand inhabitants. Remains of the monastic buildings are to be found in every direction in the shape of raised stone platforms, foundations and stone pillars. The most famous is the Brazen PalaceDutugamunu about 164 BC. The pokunas are bathing-tanks or tanks for the supply of drinking water, which are scattered everywhere through the jungle. The city also contains a sacred bo-tree, which is said to date back to the year 245 BC. The railway was extended from Kurunegala to Anuradhapura in 1905.

It was his reign that is considered the Golden Age of Polonnaruwa, when trade and agriculture flourished under the patronage of the King, who was adamant that no drop of water falling from the heavens was to be wasted, and each be used toward the development of the land; hence, irrigation systems far superior to those of the Anuradhapura Age were constructed during Parakramabahu's reign, systems which to this day supply the water necessary for paddy cultivation during the scorching dry season in the east of the country. The greatest of these systems, of course is the Parakrama Samudraya or the Sea of Parakrama, a tank so vast that it is often mistaken for the ocean. It is of such a width that it is impossible to stand upon one shore and view the other side, and it encircles the main city like a ribbon, being both a defensive border against intruders and the lifeline of the people in times of peace. The Kingdom of Polonnaruwa was completely self-sufficient during King Parakramabahu's reign.

However, with the exception of his immediate successor, Nissankamalla I, all other monarchs of Polonnaruwa, were slightly weak-willed and rather prone to picking fights within their own court. They also went on to form more intimiate matrimonial alliances with stronger South Indian Kingdoms, until these matrimonial links superseded the local royal lineage and gave rise to the Kalinga invasion by King Magha in 1214 and the eventual passing of power into the hands of a Pandyan King following the Arya Chakrawarthi invasion of Sri Lanka in 1284. The capital was then shifted to Dambadeniya.

Today the ancient city of Polonnaruwa remains one of the best planned Archeological relic sites in the country, standing testimony to the discipline and greatness of the Kingdom's first rulers. Its beauty was also used as a backdrop to filmed scenes for the Duran Duran music video Save a Prayer in 1982.

The ancient city of Polonnaruwa has been declared a World Heritage site by UNESCO.