Sava Raguzinsky, a Serb in the employ of Peter the Great, founds Kyakhta as a trading point between Russia and the Qing Empire in 1728.

The eastern terminal of the Great Siberian Route from Moscow, Kyakhta will prosper from cross-border trade with Altanbulag, which is at this time a Chinese trading center called Maimachin (Mǎimàichéng, "Trading City.")

Trade is essentially based on barter, with merchants crossing the border to make their business.

The foundation of the city is paralleled by a treaty, one of the first between China and a Western nation, named the Treaty of Kyakhta, which establishes trade agreements and defines the border between Siberia and the Qing Empire territories of Mongolia and Manchuria.

As a result of this agreement, Kyakhta is an exclusive trading point on the frontier.