The archaeological site of Varakhsha represents a trading settlement and a palace on the Silk Roads before Arab conquest. It was a Sogdian political center and the outdoor residence of BukharKhudats, bearing highly fortified citadel and the palace of rare planning with outstanding murals of the “Red” and “Blue” halls and alabaster carved decoration (8thcentury), which combines Sogdian traditions with Indian, Sasanian, Umayyad motives. Varakhsha settlement was a key military outpost on the western border of the oasis as well as a considerable trade center situated on the road between Bukhara and Khorezm and in the contact zone between the nomads and sedentary population a center of a large agricultural area irrigated by the canals not far from the western wall of the Bukhara oasis.Varakhsha also has associative values related to its exceptional role in the traditional pre-Islamic calendar of Bukhara and during the period of Arab conquest. The site also has a scientific potential to reveal the features of urban-planning, architecture, and arts typical for this type of settlements.