Between 1700 and 1703, Aurangzeb captured the fort of Sinhagad, near Pune. During the siege, his son prince Muhuil-Mulk died; so Aurangzeb changed Pune's name to Muhiabad, in the prince's honor. Shahu continued to fight against the Mughals and captured Rajgad, the former capital of the Maratha territory. In 1712, Shahu died of smallpox and his minister or Peshwa, Balaji Vishwanath took over the throne. 

        Negotiations between the Mughal court of Delhi and Balaji Vishwanath enabled him to send a large Maratha delegation to Delhi to assist the Mughals. The year 1718 marked the beginning of the Maratha influence in Delhi, to which they remained closely acquainted, till 1803. Balaji Vishwanath's health had suffered considerably, and he died in 1721. Bajirao, his elder son was then awarded the title of peshwa. It was Bajirao's dream to extend the Maratha empire to North India.

        In 1734, Bajirao captured the Malwa territory in the north, and in 1739, his brother Chimnaji drove out the Portuguese from almost all their possessions in the northern Western Ghats. Bajirao died in 1740 and left three sons behind him; Balaji Bajirao, who succeeded him as peshwa, Raghunathrao, who later betrayed the Marathas and joined hands with the British, and Janardan, who died in his early youth.

        Balaji Bajirao was ambitious and a multifaceted person. In 1741, when his uncle Chimnaji died, he returned from the northern districts and spent nearly a year improving the civil administration of Pune. The period between 1741 and 1745 was of comparative calm in the Deccan. Balaji Bajirao encouraged agriculture, protected the villagers and brought about a marked improvement in the state of the territory. 

         The scene changed in 1751, when the Mughals, supported by the French, advanced towards Pune, totally destroying every village in their way. The Marathas fought with great determination, and nothing but the French artillery saved them from total defeat. In 1754, Raghunathrao, Balaji Bajirao's brother started on an expedition to conquer Gujarat, the state north of Bombay. In 1756, Balaji Bajirao marched south to attack Karnatak. In the meantime, news spread that the war had broken out between the English and the French, in Europe.