Up until the late 16th century, Ayutthaya was continually engaged in military struggles, first against the declining Khmer empire and other Tai confederations (neighbouring Sukhothai to the north, Lanna in the far north and, less directly, Lan Xang in the northeast), then against the expanding power of the Burmese, operating out of Pegu to the west. Although Ayutthaya emerged as the leading power in the Tai world, conquering the Lanna capital of Chiang Mai and absorbing Sukhothai into its fold, it was forced in 1569 to submit to Burma under Bayinnaung, as was most of Mainland Southeast Asia. These military gains and losses were mostly temporary, however; Ayutthaya never actually established control over Chiang Mai, and shortly after Bayinnaung's death, Naresuan ended tribute and led multiple campaigns against Burma, re-establishing Ayutthaya's dominance in the Chao Phraya basin.

It was in the following 17th century that Ayutthaya truly flourished. Societal changes had resulted in people better resisting conscription, and armies couldn't be raised on the same scale as before. Combined with better city defences and internal struggles in Burma, this led to a period of peace throughout the region, which allowed Ayutthaya to leverage its actual strength: international trade.

Ayutthaya's location had been key to its growth since the 15th century. It was suited to conducting maritime trade with China, and also controlled the land route linking the Indian and Pacific Oceans. It served as a hub between India and Arabia to the west, China and Japan in the east and the Malay states in the south. Westerners arrived in the form of Portuguese in the 16th century and the Dutch early in the 17th, followed later by the French and English. The city, now greatly cosmopolitan, grew to become one of the largest in the region. In fact, George Modelski in World Cities: –3000 to 2000 estimates that Ayutthaya's population reached a million in 1700, making it the largest in the world at the time (though I actually find this figure rather hard to follow).

The Ayutthayan court's dealings with Western powers contain many stories of great intrigue. The best known is probably the rise of the Greek adventurer Constantine Phaulcon, who rose to the post of mahatthai (often translated as prime minister) under King Narai and facilitated the establishment of relations with France. (Narai exchanged embassies with Louis XIV.) Things went too far though when Phaulcon and French Jesuit missionaries tried to convert the king; resenting the foreign influence, a group of nobles led a revolution in 1688 that overthrew the king's heirs, executed Phaulcon and expelled the French from the country.

Despite the episode, commerce continued into the 18th century. Ayutthaya's wealth, however, while contributing to an increasingly sophisticated society, also led to deterioration of military readiness, leaving it unprepared for a surprise resurgence of Burmese aggression. The city fell in 1767 and was razed to the ground.

Following the fall of Ayutthaya, Thai society regrouped and rebuilt, first at Thonburi under King Taksin, then at Rattanakosin under Phutthayotfa Chulalok, who founded the Chakri Dynasty in 1782 and is also known as Rama I. (Both capitals are within the area of present-day Bangkok.) While Taksin's rule departed from the traditions of Ayutthayan kings, Rama I was careful to model his capital and its traditions after the old city of Ayutthaya, and present his reign as a continuation of the previous kingdom. "Ayutthaya" also remained as one of the names used to refer to the new capital. One could probably say it's essentially the same kingdom, rebuilt at a new capital.

Note: This has been a rather brief overview; most of the analysis is taken from Chris Baker & Pasuk Phongpaichit's A History of Thailand (which admittedly discusses Ayutthaya as more of an introduction than its central focus).