Shambhala is depicted as a spiritual kingdom within Tibetan Buddhist lore, notably appearing in the Kalachakra Tantra. Its origins are linked to ancient Indian traditions, with the Sanskrit name possibly deriving from a city near the Ganges. Hindu Puranas associate Shambhala with the future arrival of Kalki, Vishnu's final incarnation, who will usher in a new golden age. The Bon scriptures mention a similar realm called Tagzig Olmo Lung Ring.

Within the Kalachakra Tantra, Shambhala is ruled by the future Buddha, Maitreya. The narrative describes King Manjuśrīkīrti establishing the kingdom after expelling followers of solar worship, some of whom later founded Shambhala. The text prophesies that the 25th ruler, Kalki Maitreya, will emerge from Shambhala with an army to defeat negative forces and establish a global golden age, a event predicted for the mid-25th century.

In the West, Shambhala gained attention from the 17th century onwards. Esoteric traditions, particularly Neo-Theosophy, elaborated on Shambhala as a hidden spiritual center inhabited by enlightened beings working for humanity's benefit. Expeditions and various hypotheses have sought to locate Shambhala, with some connecting it to geographical locations or even seeing it as an inspiration for the fictional Shangri-La.

The concept of Shambhala is deeply intertwined with the Kalachakra Tantra, a significant text within Anuttarayoga Tantras. This Buddhist tradition was introduced to Tibet around the 11th century. The narrative within the Kalachakra Tantra details the founding of Shambhala by King Manjuśrīkīrti in the 2nd century BC. He initially expelled followers of solar worship but later invited some back, with those who remained in exile establishing the city of Shambhala. The Tantra further prophesies that when the world faces decline and conflict, the 25th ruler, Kalki Maitreya, will emerge from Shambhala. Leading a vast army, he is destined to vanquish destructive forces and initiate a new era of global peace and prosperity, an event foretold for the mid-25th century.

Interest in Shambhala grew in the West, particularly from the early 20th century. Esoteric writers expanded upon the idea of Shambhala as a hidden sanctuary for a council of enlightened masters dedicated to guiding human evolution. Alice Bailey, a prominent Neo-Theosophist, described Shambhala not as a physical place but as a spiritual center on the astral plane, the dwelling of Sanat Kumara, the governing deity of Earth. This interpretation positioned Shambhala as a cosmic nexus for spiritual power and direction.

Numerous individuals and groups have undertaken expeditions or proposed theories regarding the location of Shambhala. Explorers like Nicholas and Helena Roerich, inspired by Theosophical ideas, searched for the kingdom in the Altai Mountains and Mongolia. In the Soviet Union, figures like Gleb Bokii attempted to synthesize Kalachakra teachings with Communist ideology, seeking Shambhala's wisdom. Other theories have linked Shambhala to places such as Balkh in Afghanistan or suggested it as the inspiration for James Hilton's fictional Shangri-La, highlighting the enduring mystique and varied interpretations of this legendary realm.