The city lay on the western side of the Cimmerian Bosporus, and was founded by Milesians in the late 7th or early 6th century BC, on a hill later named Mount Mithridat.

During the first centuries of the city's existence, imported Greek articles predominated: pottery (see Kerch Style), terracottas, and metal objects, probably from workshops in Rhodes, Corinth, Samos, and Athens.

Its economic decline in the 4th–3rd centuries BC was the result of the Sarmatian conquest of the steppes and the growing competition of Egyptian grain.

This transition was arranged by one of Mithridates's generals, Diophantus, who earlier had been sent to Taurica to help local Greek cities against Palacus of the Scythian kingdom in Crimea.

The mission did not go smoothly: Paerisades was murdered by Scythians led by Saumacus, and Diophantus escaped to return later with reinforcements to suppress the revolt (c. 110 BC).