The battle, which is also called the Battle of Arbela, is considered as one of the most important battles in world history, and resulted in a decisive victory for the Macedonians, commanded by Alexander the Great against Darius III. and the Persian Empire and led to the fall of the Persian Empire. It took place in the year 331 BC probably near Mosul in modern times Iraq.

During the two years after the Battle of Issus, Alexander conquered the Mediterranean coast and Egypt. He then advanced from Syria into the heart of the Persian Empire. Alexander crossed both the Euphrates and the Tigris rivers without any opposition. Darius was building up a massive army, drawing men from all parts of his empire. The number of soldiers gathered reaches from 50,000 soldiers in modern science up to 1000000 in ancient sources, against approximately 47,000 Macedonian soldiers (including around 8,000 cavalry). Just before the battle, Darius offered Alexander a generous peace agreement. Darius would cede half of the entire Persian Empire provided Alexander cease his invasion of Persia. When presented to Alexander, he declined the offer without any consideration at all. One of Alexander's generals, Parmenion, said that if he were Alexander, he would gladly accept the more-than-generous offer. Alexander replied, "And I would too, if I were Parmenion."

Alexander began by ordering his infantry to march in phalanx formation towards the centre of the enemy line. The Macedonians advanced with the wings echeloned back at 45 degree angles to lure the Persian cavalry to attack. While the phalanxes battled the Persian infantry, Darius sent a large part of his cavalry and some of his regular infantry to attack Parmenion's forces on the left.

As the Persians advanced farther and farther to the Macedonian flanks in their attack, Alexander slowly filtered in his rear-guard. Alexander disengaged his Companions, and prepared for the decisive attack on the Persians. Leading the way, he formed his units into a giant wedge, with him leading the charge. Behind them were the guards brigade along with any phalanx battalions he could withdraw from the battle. These were follow-up light troops. Alexander took most of his cavalry and moved parallel to Darius's front lines, heading off of the prepared battlefield. In response, Darius ordered his cavalry in the front lines to block Alexander's force. Unbeknownst to Darius, Alexander hid a force of peltasts (light infantry armed with slings, javelins, and shortbows) behind his horsemen and Alexander slowly sent his force into an angle, heading toward the Persian host, until finally a gap opened between Bessus's left and Darius's centre and Alexander sent in his cavalry force to drive down the gap in the Persian line in a wedge formation. At the same time, the peltasts engaged the cavalry, in order to keep them from riding back to engage Alexander's charging cavalry. The Persian infantry at the centre were still fighting the phalanxes, hindering any attempts to counter Alexander's charge.

This large wedge then smashed right into the weakened Persian center, taking out Darius's royal guard, and the Greek mercenaries. Bessus on the left, now cut off from Darius, and fearing he would be struck with this wedge, began to pull back his forces. Darius was in danger of himself being cut off, and the widely held modern view is that he now broke and ran, with the rest of his army following him. This is based on Arrian's account.

After the battle, Parmenion rounded up the Persian baggage train while Alexander and his own bodyguard pursued Darius. As at Issus, substantial amounts of loot were gained following the battle, with 4,000 talents captured, as well as the King's personal chariot and bow. The war elephants were also captured. In all, it was a disastrous defeat for the Persians and one of Alexander's finest victories.

Darius had managed to escape the battle with a small core of his forces remaining intact. The Bactrian cavalry and Bessus managed to catch up with him, as did some of the survivors of the Royal Guard and 2,000 Greek mercenaries.

Bessus, one of Darius' generals murdered Darius before fleeing eastwards. When Alexander discovered Darius murdered, he was saddened to see an enemy he respected killed in such a fashion, and gave Darius full burial and ceremony at Persepolis, the once ceremonial capital of the Persian Empire, before angrily pursuing Bessus, eventually capturing and executing him the following year. The majority of the remaining satraps gave their loyalty to Alexander and were allowed to keep their positions. The Persian Empire is traditionally considered to have ended with the death of Darius.