Buddhism arrived late in Tibet, during the 7th century. The form that predominated, via the south of Tibet, was a blend of mahāyāna and vajrayāna from the universities of the Pāla empire of the Bengal region in eastern India. Sarvāstivādin influence came from the south west (Kashmir) and the north west (Khotan). Their texts found their way into the Tibetan Buddhist canon, providing the Tibetans with almost all of their primary sources about the Foundation Vehicle. A subsect of this school, Mūlasarvāstivāda was the source of the Tibetan Vinaya. Chan Buddhism was introduced via east Tibet from China and left its impression, but was rendered of lesser importance by early political events.

Sanskrit Buddhist scriptures from India were first translated into Tibetan under the reign of the Tibetan king Songtsän Gampo (618-649 CE). This period also saw the development of the Tibetan writing system and classical Tibetan.

In the 8th century, King Trisong Detsen (755-797 CE) established it as the official religion of the state, and commanded his army to wear robes and study Buddhism. Trisong Detsen invited Indian Buddhist scholars to his court, including Padmasambhāva (8th century CE) and Śāntarakṣita (725–788), which are considered the founders of Nyingma (The Ancient Ones), the oldest tradition of Tibetan Buddhism. Padmasambhava who is considered by the Tibetans as Guru Rinpoche ("Precious Master") who is also credied with building the first monastery building named Samye, around late 8th century. According to some legend, it is noted that, he pacified the Bon demons and made them the core protectors of Dharma Modern historians also argue that, Trisong Detsen and his followers adopted Buddhism as an act of international diplomacy, especially with the major power of those times such as China, India and states in Central Asia - who had strong Buddhist influence in their culture.