Harihara I and Bukka found the Vijayanagara kingdom

By the 1330s Muhammad bin Tughluq's hold on the south was collapsing: the governor of Ma‘bar at Madurai proclaimed himself sultan in 1333–1334, the Telugu chiefs led by Kapaya Nayaka drove the sultan's governor out of Warangal in 1336, and the Hoysala king Ballala III threw off his allegiance. In this upheaval Harihara, the eldest of the five sons of Sangama, and his brother Bukka made themselves masters of the former kingdom of Kampili on the Tungabhadra, which the sultan had annexed in 1327. Their first seat was the hill fort of Anegondi on the northern bank; by 1344 the new city of Vijayanagara, also called Vidyanagara, around the temple of Virupaksha at Hampi on the southern bank, was their capital, and the kings signed their acts with the name of the god Virupaksha, as his agents. After Ballala III was killed by the sultan of Madurai at the end of 1342 or in 1343, the brothers annexed the Hoysala lands.

The traditional account, followed by K. A. Nilakanta Sastri and by the History and Culture of the Indian People, holds that the brothers first served the Kakatiya king Prataparudra, fled to Kampili after Warangal fell in 1323, were captured when the sultan took Kampili in 1327 (1326 in the History and Culture), embraced Islam at Delhi and were sent back to govern Kampili for him; then, inspired by the sage Vidyaranya of the Sringeri monastery, they returned to Hinduism, proclaimed their independence and founded the city, and Sastri dates Harihara's coronation to 18 April 1336. In support, the History and Culture of the Indian People cites the contemporary historians Barani and Isami, who tell of a kinsman of the raja of Kampili, made governor by the sultan, who renounced Islam and declared himself independent. Historians such as Hermann Kulke, Phillip Wagoner and Vasundhara Filliozat regard Vidyaranya's part as a political foundation myth first written down some two centuries later, and the story of the brothers' conversion has also been questioned, since the early kings' inscriptions do not mention it. Another school holds that the Sangamas were Kannada commanders of the Hoysalas; in this view the date 1336, which rests on 16th-century copper plates of the Sringeri monastery that this school regards as forgeries, is unreliable, and the kingdom's beginning is better marked by the great festival the brothers held at Sringeri in 1346.

Under Bukka and his successors Vijayanagara extended its rule over most of the peninsula south of the Krishna. Its rivalry with the Bahmani Sultanate, founded in 1347, and its successor sultanates filled the history of the Deccan for two centuries. The ruins of the capital at Hampi were inscribed on the UNESCO World Heritage List in 1986.