[6][7] Scholars are not in agreement as to whether the Kharosthi script evolved gradually, or was the deliberate work of a single inventor.

An analysis of the script forms shows a clear dependency on the Aramaic alphabet but with extensive modifications.

Kharosthi seems to be derived from a form of Aramaic used in administrative work during the reign of Darius the Great, rather than the monumental cuneiform used for public inscriptions.

[4] The Kharosthi script was deciphered separately almost concomitantly by James Prinsep (in 1835, published in the Journal of the Asiatic society of Bengal, India)[9] and by Carl Ludwig Grotefend (in 1836, published in Blätter für Münzkunde, Germany),[10] with Grotefend "evidently not aware" of Prinsep's article, followed by Christian Lassen (1838).

[11] They all used the bilingual coins of the Indo-Greek Kingdom (obverse in Greek, reverse in Pali, using the Kharosthi script).

This alphabet was used in Gandharan Buddhism as a mnemonic for the Pañcaviṃśatisāhasrikā Prajñāpāramitā Sūtra, a series of verses on the nature of phenomena.

Each syllable includes the short /a/ sound by default[citation needed], with other vowels being indicated by diacritic marks.

A further diacritic, the double ring below ⟨𐨍⟩ appears with vowels -a and -u in some Central Asian documents, but its precise phonetic function is unknown.