As Teotihuacán and Monte Albán became to decline in the 7th/8th centuries, several other highland cities began to reassert their influence in the region, in a communication sphere that included sites such as Cacaxtla, Chichén Itzá, El Tajín, Teotenango and Xochicalco. Cacaxtla was a fortified hilltop settlement overlooking the valley of Tlaxcala, built on a site that had been occupied since the Preclassic Period. There were at least five stages of contruction at Cacaxtla, which included a palace complex, temple-shrines and altars, and also several distinctive corridor-like structures which were thought to be part of the sytem of defences: a series of long, low buildings arranged round patios over several levels and joined by staircases which would have been easy to defend.

Cacaxtla's patios and doorways were the sites of human offerings, mainly of babies and children: 208 skeletons have been found, including those of 199 infants, probably offered as dedication sacrifices when the buildings were completed. In the sacrifices, the bones were scattered randomely, together with obsidian points and scrapers, shells, figurines of animals, bone needles and jewellery.

Cacaxtla is most famous for its fantastic polychromed murals that were painted in a thoroughly Maya style. Scenes include a great battle between jaguar-clad and feathered warriors, and on a wall flanking a stairway leading to the subterranean Red Temple, a polychrome rendering of the Maya God L, the god of merchants (here given the non-Maya name of 4 Dog), complete with his cacaxtli - the merchant's backpack that gives the site its name.

The site of Cacaxtla contains the most important evidence of Maya groups in central Mexico. The Tlaxcalan historian Diego Muñoz Camargo at the end of the 16th century described Cacaxtla as the principal seat of the “Olmeca-Xicalanca” who originated from the Gulf coast area and whose capital was then Cholula. "Olmeca" is not to be confused with the archaeological Olmec culture, which died out around 400 BCE, almost 800 years earlier, and means people who came from the southern Gulf coast; 'Xicalanca' was a trading town controlled by the Maya-speaking Putún who ranged along the coast of the entire Yucatan peninsular.

Cacaxtla rose to power c. AD 700 - 800 and following the fall of nearby Cholula (ca. 600), in which the Cacaxtlecas might have been involved, the city became the hegemonic power in this part of the Tlaxcala–Puebla valley. Its ascendancy came to an end around 900 CE and, by 1000, the city had been abandoned.