There is a long history of Buddhism in Greece and in Greek culture. Greco-Buddhism, sometimes spelt Graeco-Buddhism, refers to the cultural syncretism between Hellenistic culture and Buddhism, which developed between the 4th century BCE and the 5th century CE in the area covered by modern Afghanistan, Pakistan and north-western border regions of modern India namely western portions of Jammu and Kashmir. It was a cultural consequence of a long chain of interactions begun by Greek forays into India from the time of Alexander the Great, carried further by the establishment of Indo-Greek rule in the area for some centuries, and extended during flourishing of the Hellenized empire of the Kushans. Greco-Buddhism influenced the artistic (and perhaps the conceptual) development of Buddhism, particularly Mahayana Buddhism, before Buddhism was adopted in Central and Northeastern Asia, from the 1st century CE, ultimately spreading to China, Korea and Japan.
The interaction between Hellenistic Greece and Buddhism started when Alexander the Great conquered the Achaemenid Empire and further regions of Central Asia in 334 BCE, crossing the Indus and Jhelum rivers, and going as far as the Beas, thus establishing direct contact with India, the birthplace of Buddhism.
Alexander founded several cities in his new territories in the areas of the Oxus and Bactria, and Greek settlements further extended to the Khyber Pass, Gandhara (see Taxila) and the Punjab. These regions correspond to a unique geographical passageway between the Himalayas and the Hindu Kush mountains, through which most of the interaction between India and Central Asia took place, generating intense cultural exchange and trade.
Following Alexander's death on June 10, 323 BCE, the Diadochoi (successors) founded their own kingdoms in Asia Minor and Central Asia. General Seleucus set up the Seleucid Kingdom, which extended as far as India. Later, the Eastern part of the Seleucid Kingdom broke away to form the Greco-Bactrian Kingdom (3rd–2nd century BCE), followed by the Indo-Greek Kingdom (2nd–1st century BCE), and later the Kushan Empire (1st–3rd century CE).
The interaction of Greek and Buddhist cultures operated over several centuries until it ended in the 5th century CE with the invasions of the White Huns, and later the expansion of Islam.
Evidence of direct religious interaction between Greek and Buddhist thought during the period include the Milindapanha, a Buddhist discourse in the platonic style, held between king Milinda and the Buddhist monk Nagasena.
According to the Mahavamsa, the Great Stupa in Anuradhapura, Sri Lanka, was dedicated by a 30,000-strong "Yona" delegation from "Alexandria" around 130 BCE.
Also the Mahavamsa (Chap. XXIX) records that during Menander's reign, "a Greek ("Yona") Buddhist head monk" named Mahadharmaraksita (literally translated as 'Great Teacher/Preserver of the Dharma') led 30,000 Buddhist monks from "the Greek city of Alexandria" (possibly Alexandria-of-the-Caucasus, around 150km north of today's Kabul in Afghanistan), to Sri Lanka for the dedication of a stupa, indicating that Buddhism flourished in Menander's territory and that Greeks took a very active part in it.
Several Buddhist dedications by Greeks in India are recorded, such as that of the Greek meridarch (civil governor of a province) named Theodorus, describing in Kharoshthi how he enshrined relics of the Buddha. The inscriptions were found on a vase inside a stupa, dated to the reign of Menander or one his successors in the 1st century BCE (Tarn, p391):
"Theudorena meridarkhena pratithavida ime sarira sakamunisa bhagavato bahu-jana-stitiye": "The meridarch Theodorus has enshrined relics of Lord Shakyamuni, for the welfare of the mass of the people."
This inscription represents one of the first known mention of the Buddha as a deity, using the Indian bhakti word Bhagavat ("Lord", "All-embracing personal deity"), suggesting the emergence of Mahayana doctrines in Buddhism.
Finally, Buddhist tradition recognizes Menander as one of the great benefactors of the faith, together with Ashoka and Kanishka.
Buddhist manuscripts in cursive Greek have been found in Afghanistan, praising various Buddhas and including mentions of the Mahayana Lokesvara-raja Buddha (λωγοασφαροραζοβοδδο). These manuscripts have been dated later than the 2nd century CE. (Nicholas Sims-Williams, "A Bactrian Buddhist Manuscript").
Some elements of the Mahayana movement may have begun around the 1st century BCE in northwestern India, at the time and place of these interactions. According to most scholars, the main sutras of Mahayana were written after 100 BCE, when sectarian conflicts arose among Nikaya Buddhist sects regarding the humanity or super-humanity of the Buddha and questions of metaphysical essentialism, on which Greek thought may have had some influence: "It may have been a Greek-influenced and Greek-carried form of Buddhism that passed north and east along the Silk Road."