Siddharthnagar district was carved out on 29 December 1988 by bifurcating Basti district. The new district comprised the Northern part of the erstwhile Basti district.
Today's Piprahwa (22 km from Siddharthnagar) is identified with ancient Kapilvastu where Lord Buddha spent the early years of his life. Kapilvastu was the capital of the Shakya clan whose ruler was the father of Lord Buddha, and therefore Lord Buddha is also called as Shakyamuni. The Sakya domain was one of the sixteen independent principalities of the 6th century BC.