It is said that Gautama Buddha had predicted that four hundred years after his death a king would erect a stupa to contain many relics of the Buddha's bones and flesh. Kanishka had heard this story. One day while hunting a white hare in the forest (Peshawar area), he met a shepherd boy building a stupa of mud. Fa-hien said that the shepherd was Indra in disguise. Kanishka ordered to build a stupa on the spot and enshrined a number of relics of the Buddha in it.

Buddha had also predicted that the stupa would be seven times burnt down and seven times rebuilt, and the religion itself would disappear from here (Gandhara). At the time of Huan Tsang's visit, it had been again reduced to ashes for the fourth time. Both the pious travelers relate the same legend according to which after the seventh time, the law of the Buddha would become finally extinct in the country. A Chinese source said that Kanishka himself placed a ball of clay on the stupa praying that it might become an image of the Buddha and the image at once appeared. Huan Tsang had mentioned in his accounts that there were big images of Buddha on the eastern side of the stupa, some were painted and some were gold-washed. The stupa as having a square-shaped plinth which was 100 meters wide on each side and decorated with Stucco images of Buddha. Above this projected a stone tower some 50 meters metres high and above that a further 100 meters of wood.

The tower was capped with 10 metres of gold-leafed iron finial and was in total height the equivalent of a modern 13 storey building. This was quite a remarkable engineering feat and it would have undoubtedly been considered an architectural marvel in its time. The foundations of the lost stupa were identified in 1895-97 by Alfred Foucher and excavated by D. B. Spooner in 1908-09. In another example, Xuan Zang described a pillar at Lumbini in Nepal. The pillar had been erected by Asok, the great Mauryan emperor, near the tree which was said to mark the Buddha's birthplace. This pillar, which was subsequently lost for a millennia was only rediscovered in 1895.