By the thirteenth century, Louang Phabang had emerged as one of the chief Tai centres of the Upper Mekong, an area settled by people who called themselves Lao . A century later, though still significant, Louang Phabang, then known as Xiang Dong Xiang Thong, had become but one of many small Lao principalities on the fringes of two larger Tai states: Lan Na, centred on Chiang Mai, and Sukhothai.

Lao legends tell of a young prince called Fa Ngum who was cast out of Xiang Dong Xiang Thong principality, only to be taken in by the Khmer court at Angkor, where he married a Khmer princess. Provided with an army by the Khmer king, Fa Ngum fought his way up the Mekong valley in 1351 - subduing the principalities of the lower Mekong valley, capturing Muang Phuan, the capital of Xiang Khouang principality, and then ascending the throne in Xiang Dong Xiang Thong in 1353. Fa Ngum called his new kingdom Lane Xang Hom Khao , the Kingdom of a Million Elephants and the White Parasol, and during his reign expanded its borders south into northeastern Thailand and north into present-day Xishuangbanna in China.

Fa Ngum's son, Oun Heuan (1373-1417), ruled peacefully for 43 years, but then followed a turbulent period culminating in a major Vietnamese invasion in 1479, which destroyed Xiang Dong Xiang Thong. But Lane Xang recovered quickly, coalescing in particular under Visoun (1500-1520), who reinforced the role of Buddhism in Laos by bringing the golden Buddha image, the Pha Bang, to Xiang Dong Xiang Thong from Vientiane in 1512 and establishing it as the symbol of a unified kingdom.