One of the oldest Russian cities, it was a major commercial and cultural center of medieval Europe. Rurik, who is said to have founded the dynasty that ruled Kievan Rus in 862, was invited by the inhabitants of Novgorod to rule them, according to unreliable early accounts. Culturally, the city was the equal of Kiev; the bulk of ancient manuscripts originated in Novgorod. The capital was transferred to Kiev by Oleg in 886, but Novgorod remained the chief center of foreign trade. It obtained self-government in 997 and achieved independence from Kiev in 1136, when it became the capital of an independent republic, Sovereign Great Novgorod, that embraced the whole of N Russia to the Urals. Novgorod was governed by a popular assembly or veche that elected—and often exiled—the dukes. Although they held supreme military and judicial powers, the dukes had no legislative or administrative functions; these powers were vested in elected magistrates. However, the popular assemblies were disorderly, and power was gradually amassed by the aristocracy.
The strength of the republic rested on its economic prosperity. Situated on the great trade route to the Volga valley, it became, with London, Bruges, and Bergen, one of the four chief trade centers of the Hanseatic League. German merchants had a colony in Novgorod. Furs, hides, wax, honey, flax, and tar were the chief exports. Cloth and metals were imported from Europe and corn from central Russia. Transit trade with Central Asia reached a great volume. The enterprising merchants of Novgorod extended the power of the republic over the entire north of Russia, levied tribute even beyond the Urals, and founded many colonies. The citizens of Novgorod repulsed the attacks of the Teutonic Knights and Livonian Knights and of the Swedes and escaped the Mongol invasion. At its height, in the 14th cent., its population rose to c.400,000. Its splendor during that period, its hundreds of churches, its great shops and arsenals, its huge fairs, have all furnished rich themes for later Russian art and folklore.
The 14th cent., however, also witnessed the start of Novgorod's long struggle with Moscow for supremacy. Internecine disputes among the republic's leaders weakened it in the face of growing Muscovite strength. Although it became a vassal of Moscow after the Muscovite invasions in 1456 and 1470, Novgorod was allowed to retain its self-government. It was not until 1478 that it came under Moscow's complete control and lost its freedom. Novgorod retained its commercial position until St. Petersburg was built in 1703.