Founded by the Sri Lankan Buddhist leader Anagarika Dharmapala and the British journalist and poet Sir Edwin Arnold, its first office was in Bodh Gaya.
The organization's efforts began in order to resuscitate Buddhism in India, and to restore the ancient Buddhist shrines at Bodh Gaya, Sarnath and Kushinara.
[6] Prior to that, in 1885 Sir Edwin Arnold visited the site and published several articles drawing the attention of the Buddhists to the deplorable conditions of Bodh Gaya.
[2][3][4] The Buddhist renaissance inaugurated by Anagarika Dharmapala through his Mahabodhi Movement has also been described as "conservative" for it considered Muslim conquest in the Indian subcontinent responsible for the decay of Buddhism in India, in the then current mood of Hindu-Buddhist brotherhood.
After the defeat of the Palas by the Hindu Sena dynasty, Buddhism's position again began to erode and was soon followed by the conquest of Magadha by General Ikhtiar Uddin Muhammad Bin Bakhtiyar Khilji.
The campaign was partially successful in 1949, when control passed from the Hindu mahant to the state government of Bihar, which established a temple management committee.
Mahabodhi's first head monk under the management committee was Anagarika Munindra, a Bengali man who had been an active member of the Maha Bodhi Society.
When he decided to construct a temple at Sarnath and after making the architectural plans, his generous Hawaiian patron, Mary Robinson Foster, donated the first financial assistance that came from her parents, brother and well-wishers.
The Vihara, an attractive place of Buddhist worship was visited by numerous Indian and foreign dignitaries and millions of pilgrims and tourists over the past decades.