Ghaznī's early history is obscure; it has probably existed at least since the 7th century. Early in the 11th century, under Maḥmūd of Ghazna, the town became the capital of the vast empire of the Ghaznavids, Afghanistan's first Muslim dynasty. The dynasty lost much of its power later in the same century, and Ghaznī was sacked in 1150–51 by the Ghūrids. The town was fought over by various peoples before the Mongols secured it by 1221. They ruled the area until Timur (Tamerlane), the Turkic conqueror, arrived in the 14th century, and his descendants ruled it until 1504, when the Indian Mughals took Ghaznī and Kābul. In 1747, under Aḥmad Shāh Durrānī, Ghaznī became part of the new Afghan kingdom. It was captured by the British during the First Anglo-Afghan War (1839–42). Ghaznī recovered some importance when it became the main town on the Kābul-Qandahār highway.

Ghaznī is now a chief commercial and industrial centre of Afghanistan, dealing in livestock, furs, silk, and agricultural products. Pop. (2006 est.) 48,700.