The Xiongnu in Ye had been partitioned into five local tribes after the death of their leader Hucuquan.

The complicated ethnic situation of the mixed frontier settlements instituted during the Eastern Han had grave consequences, not fully apprehended by the Chinese government until the end of the third century.

By 260, Liú Qùbēi had organized the Tiefu confederacy in the North East, and by 290 was leading a splinter group in the southwest.

By this time, non-Chinese unrest has reached alarming proportions along the whole of the Western Jin frontier.

In 304, the sinicized Liu Yuan, a grandson of Yufuluo Chizhisizhu, stirs up descendants of the southern Xiongnu in rebellion in Shanxi, taking advantage of the War of the Eight Princes now raging around the Western Jin capital Luoyang.

Under Liu Yuan's leadership, they are joined by a large number of frontier Chinese and become known as Bei Han.

Liu Yuan uses 'Han' as the name of his state, hoping to tap into the lingering nostalgia for the glory of the Han dynasty, and establishes his capital in Pingyang.

The Xiongnu’s use of large numbers of heavy cavalry with iron armor for both rider and horse gives them a decisive advantage over Jin armies already weakened and demoralized by three years of civil war.

Xiongnu nobles, tired of Jin misrule and secretly plotting independence from Jin, send a messenger in 304 to secretly offer Liu Yuan, the commander of the North Tribe of the Xiongnu, the title of Grand Chanyu.

Liu Yuan then tells Sima Ying, who is concerned about an attack from Wang Jun, whose troops are reinforced with Xianbei and Wuhuan soldiers, that he would be willing to mobilize Xiongnu soldiers to support Sima Ying's cause.

Sima Ying agrees and allows Liu Yuan to return to the Xiongnu tribes.

Once Liu Yuan returns to his people, he gathers fifty thousand men quickly and is readying himself to rush to Sima Ying's aid, but he also publicly accepts the title of Grand Chanyu.

(Previously, Sima Ying had bestowed the title of North Chanyu on him.)

However, he then hears that Sima Ying's forces have collapsed in fear of Wang's troops and that Sima Ying had, against his prior advice, fled to Luoyang.

He now declares his people independent from Jin and further declares that, as a Han descendant, he will succeed to the Han throne legitimately, and therefore claims the title of the Prince of Han—deliberately choosing a title that had been previously held by Han Dynasty's founder, Liu Bang (Emperor Gao).

He reestablishes the worship of eight Han emperors—Emperor Gao, Emperor Wen, Emperor Wu, Emperor Xuan, Emperor Guangwu, Emperor Ming, Emperor Zhang, and Liu Bei (Emperor Zhaolie)—and creates his wife Lady Huyan (likely a relative of his mother) princess.

(The name of Liu's state was therefore "Han," but is often referred to as "Han Zhao" or "Former Zhao" because his nephew Liu Yao, who will take the throne in 318, will change the name of the state to Zhao in 319.)

He spends great energy on trying to restore the Han system of government, but he himself is unable to quickly expand his sphere of influence.

He establishes his capital at Lishi (in modern Lüliang, Shanxi), but his control of territory becomes limited to this local region.

His forces are often able to achieve victories over Jin forces but unable to hold cities.

Liu Yuan relocates after a famine in 305 to Liting (in modern Changzhi, Shanxi).

Wang Jun's troops advance on the Jin capital Luoyang in 308, but are repelled.

This year, after capturing additional territory, Liu Yuan moves his capital to Puzi (in modern Linfen, Shanxi) and declares himself emperor, signifying an even more complete break from Jin.

Liu Yuan grows ill in 310, and he creates his second wife Lady Dan empress and his oldest son Liu He (by his first wife Empress Huyan—who appears to have died by this point, although her death is not mentioned in history) crown prince.

When he dies later this year, Liu He becomes emperor.

However, only a week later, he is overthrown and killed by Liu Cong, who now becomes emperor.

The various agrarian rebel generals who are resisting Jin rule, whether ethnically Wu Hu or Han, often choose to come under Liu Yuan's Han banner as years pass.

Chief among these are the Han general Wang Mi and the Jie general Shi Le (both of whom had declared loyalty to Han Zhao in 307), who generally only nominally submit to Liu's orders while maintaining separate power structures but who also so appear to genuinely respect and fear Liu.

As for troops under his own control, Liu largely entrusts them to his son Liu Cong the Prince of Chu and his nephew Liu Yao the Prince of Shi'an.

The four generals, while unable to hold cities, are generally able to rove throughout northern and central China unimpeded by Jin forces, defeating most Jin generals who oppose them.