The Licchavi era was followed by the Malla era. Rulers from Tirhut, upon being attacked by Muslims, fled north to the Kathmandu valley. They intermarried with Nepali royalty, and this led to the Malla era. The early years of the Malla era were turbulent, with raids and attacks from Khas and Turk Muslims. There was also a devastating earthquake which claimed the lives of a third of Kathmandu's population, including the king Abhaya Malla. These disasters led to the destruction of most of the architecture of the Licchavi era (such as Mangriha and Kailashkut Bhawan), and the loss of literature collected in various monasteries within the city. Despite the initial hardships, Kathmandu rose to prominence again and, during most of the Malla era, dominated the trade between India and Tibet. Nepali currency became the standard currency in trans-Himalayan trade.

Who ruled Nepal after the Licchavi?