In the early 2nd century BC, a tribe on the Central Asian frontier of China called Hsiung-nu defeated a neighboring one known as Yueh-chih. After more conflict, the survivors of the Yueh-chih were dislocated west, passing down the Ili river valley and along the southern shore of lake Issyk Kul. This movement also pushed Saka tribes (and others) ahead of them. Sometime between 145 and 125 BC, these nomad invaders burst into Bactria and Parthia.
A generation later, they were pressing into the Kabul valley and onto the Punjab plain. At around the beginning of the Christian era, one of the five Yueh-chih chiefs, K'iu-tsiu-k'io, attacked and defeated the others, leaving his clan in control; the Kuei-shang (Kushans).
Kujula Kadphises (30-80 AD) established the Kushan dynasty in 78 AD by taking advantage of disunion in existing dynasty of Pahalava (Parthian) and Scytho-Parthians, and gradually wrested control of southern prosperous region, which is the northwest part of ancient India, traditionally known as Gandhara (now Pakistan). It was his grandson Vima Kadphises who made Kushan a paramount power of northern India. His reign saw emergence of Kushan empire when he conquored north-western India (modern Punjab). Soon he came under influence of Hinduism (most likley embraced it for good) and took opportunity to proclaim himself Mahishwara, another name for Lord Shiva, on his coins (Shiva is a prominent Hindu god). Kushan kings introduced gold and copper coins, a large number of them have survived till today. It was the Kushan emperor, Vima Kadaphises who introduced the first gold coins of india. Kushan empire covered north west of India (includes Pakistan and modern Afganistan) and northern India. Ample evidences of trade with China, cental Asia, Egypt and Rome are available which made their economy very strong and kingdom wealthy and prosperous.
Vima's able son Kanishka (100 - 126 AD) followed and took control of this dynasty in 100 AD. Kanishka is the legendary ruler of ancient India and according to most historians the greatest ruler of Kushan dynasty. He and his descendents called themselves `Devputra' which means son of god, who ruled Aryavarta, the India. He established an era, commonly known as Shaka era, starts from 78 AD. Shaka era is still in use in India. Kanishka's empire consisted Bactria (modern Afghanistan), part of central Asia (Tajikistan), north-western India (modern Pakistan) and Northern India till Pataliputra or Patana. Kushan empire.
Huvishka succeeded Kanishka I. He was founder of a city Hushka in Kashmir named after him (described by Kalhan in Rajatarangini). Kushana empire was at its zenith during Kanishka's and Huvishka's reign. After Huvishka's reign, Vasudeva I took control of this dynasty which by then had lost control over regions beyond Bactria or perhaps the Bactria itself. The Kushan dynasty had been totally assimilated in Indian culture. Vasudeva I was the last great king of the dynasty when Kushana empire was at it's height of splendor and prosperity.
Kushan empire had started its decline soon after Vasudeva's death. Vasudeva was followed by his son (?) Kanishka II who lost all the territories west of river Indus to Sassanians. Vasudeva II, Vashishka, and Shaka are the kings who followed after the Kanisha II. After Vashishka the Kushan empire had completly disintegrated into few small kingdoms. By fourth century AD this dynasty went into total obscurity with advent of mighty Gupta emperors.