Urban developments were underway in Central Mexico at least as early as 400 BCE, at Cuicuilco and probably at Cholula and elsewhere in Puebla/Tlaxcala. By 100 BCE, Teotihuacan began to grow rapidly, and by 100 CE it covered about 20 square km, with a population probably close to 60,000. Thereafter, the spatial extent of the city changed little, although the southern part of the city filled in more. The rate of population growth slowed, and the city seems to have leveled off at around 70,000–100,000. The Teotihuacan polity continued to expand, and the scale and complexity of the political system increased.

Early political institutions and ethics may have been collective, but the scale of civic-ceremonial structures in the city's core and the rapidity of developments suggest the leadership of some talented, charismatic, and highly motivated individuals. I suspect that by the first century CE the system was subverted by more despotic leaders who were responsible for the largest pyramids and an increased scale of human sacrifice. The Teotihuacan polity soon began to reach beyond the Basin of Mexico, and by 200 CE, if not earlier, there were Teotihuacan presences, probably primarily to obtain materials not available in Central Mexico, as far away as Pacific coastal Guatemala, 1,100 km from the city. No other Mesoamerican polity before the Aztecs had comparably distant outposts. It is unclear how directly they were administered from the city, and it seems unlikely that Teotihuacan ever directly administered large blocks of territory far from the capital. However, Teotihuacanos or people with strong Teotihuacan connections intervened directly in the politics of some Early Classic Maya polities, and apparently founded new dynastic lines at Tikal and Copán.

Sometime in the 300s there may have been a shift in ideology, marked by desecration of the FSP, and perhaps new political institutions that returned to a more collective ethos that provided an arena for “corporate” strategies and practices.