quality:corruption
Mobile monastery

Founded in 1639 as a yurt monastery as Örgöö (lit. ' palace- yurt '), the settlement was first located at Lake Shireet Tsagaan nuur (75 kilometres (47 miles) directly east of the imperial capital Karakorum) in what is now Burd sum, Övörkhangai, around 230 kilometres (143 miles) south-west from the present site of Ulaanbaatar, and was intended by the Mongol nobles to be the seat of Zanabazar, the first Jebtsundamba Khutughtu. Zanabazar returned to Mongolia from Tibet in 1651, and founded seven aimags (monastic departments) in Urga, later establishing four more.

As a mobile monastery-town, Örgöö was often moved to various places along the Selenge, Orkhon and Tuul rivers, as supply and other needs would demand. During the Dzungar wars of the late 17th century, it was even moved to Inner Mongolia. As the city grew, it moved less and less.

The movements of the city can be detailed as follows: Shireet Tsagaan Nuur (1639), Khoshoo Tsaidam (1640), Khentii Mountains (1654), Ogoomor (1688), Inner Mongolia (1690), Tsetserlegiin Erdene Tolgoi (1700), Daagandel (1719), Usan Seer (1720), Ikh Tamir (1722), Jargalant (1723), Eeven Gol (1724), Khujirtbulan (1729), Burgaltai (1730), Sognogor (1732), Terelj (1733), Uliastai River (1734), Khui Mandal (1736), Khuntsal (1740), Udleg (1742), Ogoomor (1743), Selbe (1747), Uliastai River (1756), Selbe (1762), Khui Mandal (1772) and Selbe (1778).

In 1778, the city moved from Khui Mandal and settled for good at its current location, near the confluence of the Selbe and Tuul rivers, and beneath Bogd Khan Uul, at that time also on the caravan route from Beijing to Kyakhta.

One of the earliest Western mentions of Urga is the account of the Scottish traveller John Bell in 1721:

What they call the Urga is the court, or the place where the prince (Tusheet Khan) and high priest (Bogd Jebtsundamba Khutugtu) reside, who are always encamped at no great distance from one another. They have several thousand tents about them, which are removed from time to time. The Urga is much frequented by merchants from China and Russia, and other places.

By Zanabazar's death in 1723, Urga was Mongolia's preeminent monastery in terms of religious authority. A council of seven of the highest-ranking lamas (Khamba Nomon Khan, Ded Khamba and five Tsorj) made most of the city's religious decisions. It had also become Outer Mongolia's commercial center. From 1733 to 1778, Urga moved around the vicinity of its present location. In 1754, the Erdene Shanzodba Yam of Urga was given authority to supervise the administrative affairs of the Bogd's subjects. It also served as the city's chief judicial court. In 1758, the Qianlong Emperor appointed the Khalkha Vice General Sanzaidorj as the first Mongol amban of Urga, with full authority to "oversee the Khuree and administer well all the Khutugtu 's subjects".

In 1761, a second amban was appointed for the same purpose, a Manchu one. A quarter-century later, in 1786, a decree issued in Peking gave right to the Urga ambans to decide the administrative affairs of Tusheet Khan and Setsen Khan territories. With this, Urga became the highest civil authority in the country. Based on Urga's Mongol governor Sanzaidorj's petition, the Qianlong Emperor officially recognized an annual ceremony on Bogd Khan Mountain in 1778 and provided the annual imperial donations. The city was the seat of the Jebtsundamba Khutugtus, two Qing ambans, and a Chinese trade town grew "four trees" 4.24 km (2.63 mi) east of the city center at the confluence of the Uliastai and Tuul rivers.

By 1778, Urga may have had as many as ten thousand monks, who were regulated by a monastic rule, Internal Rule of the Grand Monastery or Yeke Kuriyen-u Doto'adu Durem. For example, in 1797 a decree of the 4th Jebtsundamba forbade "singing, playing with archery, myagman, chess, usury and smoking"). Executions were forbidden where the holy temples of the Bogd Jebtsundama could be seen, so capital punishment took place away from the city.

In 1839, the 5th Bogd Jebtsundamba moved his residence to Gandan Hill, an elevated position to the west of the Baruun Damnuurchin markets. Part of the city was moved to nearby Tolgoit. In 1855, the part of the camp that moved to Tolgoit was brought back to its 1778 location, and the 7th Bogd Jebtsundamba returned to the Zuun Khuree. The Gandan Monastery flourished as a center of philosophical studies.