Kosala as a geographical unit was existed in ancient Odisha. The earliest depiction of Kosala is found in the Parisistha of the Atharvaveda. The Epics and the Puranas also throw light on its ancient history. It was named after- like Kalinga, Utkala and Odra – an ancient people called Kosalas. The kingdom of Kosala was divided into two units- Uttara (north) and Daksina (south) from very early time. The territory of Kosala is attributed to a mythical origin. Rama, the Prince of Kosala, being banished with his brother Laxmana and his wife Sita travelled south from Ayodhya to Prayaga. Travelling south-west up to Narmada valley, he came up to a place identified with modern Chhatisgarh area. He dwelt there for at least a decade. Pargiter opines that his long stay in that region gave rise to the name Dakshina Kosala (South Kosala), after his original homeland Kosala. The Ramayana projects the fact that after Rama, the kingdom of Kosala was divided between his two sons-Lava and Kusa holding sway over North Kosala and South Kosala respectively. Sravasti was the centre of political activities for North Kosala while Kusavati or Kusthalipura, near the Vindhyas, was regarded as the citadel of political power for Southern Kosala.
Kosala also finds mention in the “Vana Parva’ of the Mahabharata. Of course, the great epic remains silent about Uttara Kosala (North Kosala) which comprised the Ayodhya region. However, H. C. Raychaudhuri locates Dakshina Kosala in the territory comprising the modern districts of Bilaspur, Raipur and undivided Sambalpur. The Allahabad pillar inscription of Harisena includes Kosala among the territories of Dakshinapatha which were subjugated by Samudragupta. Kosala along with Mekala and Malava formed the empire of the Vakatakas and after their fall, it came under the grip of the Sarbapuriyas. Hiuen Tsang who visited Kosala in 639 A D. described the kingdom as 6000 li in circuit. As per the description, it may be presumed that Kosala comprised the districts of Bilaspur and Raipur in Madhya Pradesh along with the undivided districts of Sundargarh, Sambalpur and Bolangir in Odisha. Kosala remained under the Somavamsis in the eighth-ninth century A.D. At about the middle of the ninth century A.D. when Kalachuris of Dahala became a rival power of the Somavamsis, the latter had to shift the centre of their political activities to Sripura which was captured by the Kalachuris subsequently. Then, the Somavamsis had to shift their head quarters to various places like Murasimakataka, Arama and Vinitapura identified with Murshing, Rampur and Binaka respectively, all in the Bolangir district.
With the annexation of Khinjali mandala, Yajatinagara became the capital of Kosala. The formidable Somavamsi king Yajati II brought Kosala and Utkala under one umbrella about the middle of the eleventh century A. D., making Suvarnapura (at the confluence Mahanadi and Tel) the capital of Kosala and Yajatinagar, (Viraja in Jajpur) the capital of Utkala. When the Somavamsi power declined away, the Telugu Chodas occupied Kosala towards the close of the eleventh century A.D. They were subsequently driven away by the Kalachuris who established their sway over the region for a long time till the Gangas established their authority over this region and their rule continued till the middle of fourteenth century A.D. Outsting them from power, the Chauhans rose to political prominence and made Sambalpur the centre of their political ativities. They became the overlord eighteen states (Atharagarha) comprising almost the whole Kosala country described by the Chinese pilgrim Hiuen Tsang.