In 710 Empress Genmei decided to move the capital to Heijo-kyo (Nara), a site considered ideal according to the Chinese principles of geomancy. Modelled on Chang'an, imperial seat of the Chinese Tang dynasty (618-907), the new city was built in just two years using lumber and tiles from Fujiwara-kyo.

The city occupied an area of 5.9 kilometres from east to west and 4.8 kilometres from north to south and incorporated a 1.2 square-kilometre walled palace compound at its northern perimeter. Divided into squares with an orderly configuration of streets in a grid pattern, it was dissected by a 74 metre-wide main thoroughfare known as the Suzaku-oji, which led from the Rajomon or main city gate to the Suzakumon or main gate of the palace compound. The primary buildings of the palace compound were the Daigokuden or Hall of State, where national events such as coronations or meetings with foreign dignitaries were conducted, the Chodo-in or government offices, and the Dairi or imperial residence. There were also various administrative offices.

It was at Heijo-kyo that Japan’s first true domestic architectural style, shinden-zukuri, first developed. Named after the shinden or main hall of the imperial palace, shinden-zukuri was originally characterised by a complex of palace buildings laid out symmetrically around the shinden and connected to it by corridors. Loosely modelled on the design of Buddhist temple sanctuaries, the shinden itself comprised a central living space (moya) surrounded on all four sides by verandas (hisashi). The moya would have been sectioned off using movable partitions such as byobu (folding screens), tsuitate (single screens) or kicho (portable stands). Guests and residents would be seated on mats.

During the Nara Period the government officially supported Buddhism and Emperor Shomu (724-749) established a system of provincial monasteries (kokubunji) and nunneries (kokubunniji), building Todai-ji Temple (752) as the headquarters of this network. Other important temples built at Heijo-kyo under court patronage included Kofuku-ji Temple (relocated from Asuka in 710), Daian-ji (relocated from Heijo-kyo in 710), Gango-ji Temple (moved from Asuka in 718), Yakushi-ji Temple (moved from Fujiwarakyo in 718) and Saidai-ji Temple (built in 765) – see Buddhist architecture in the Nara period (710-794).

Heijo-kyo functioned as Japan’s imperial capital for 74 years, and at its height is known to have had a population of around 100,000. When the court relocated in 784, the site was simply abandoned, and within a few centuries very little was left above ground. However, many of the foundations of its buildings remained visible, and archaeological work headed by the National Research Institute for Cultural Properties, Nara has been ongoing since 1952, when the site was declared a Special Historical Site by the Agency for Cultural Affairs. In 1998 the monuments of the Nara period were collectively inscribed on the UNESCO World Heritage list as the Historic Monuments of Ancient Nara World Heritage Site. Both the Suzakumon and Tou-in Garden have been rebuilt and opened to public, and the restoration of the first Daigoku-den is ongoing.

In 784 Emperor Kammu moved his capital from Heijo-kyo to Nagaoka-kyo, but just 10 years later, because of the location's high humidity and reputation as a breeding ground for disease, it relocated again, this time to Heian-kyo (Kyoto).