When Liu Bang entered Ba Shang, he ordered his men to burn the Jian path to show that he would not return to Xian Yang. In Han Zhong, Liu Bang focused his efforts on developing new agricultural methods for the people and trained his troops. He accumulated vast wealth and used it to increase his military power. Also, he had Zhang Liang, Han Xin, and Xiao He as his most trusted strategists, helping form a plan of attack of Xiang Yu.

Within a year, Han Xin conquered four new territories and surrounded the remaining Chu army. In the year 202BC, Liu Bang signed a treaty with Xiang Yu. They agreed that the west would belong to the Han, and the east belongs to Chu. With this agreement, Xiang Yu lead his troops back to his camp, but Liu Bang's army then trapped Xiang Yu at He Xia. Xiang Yu finally committed suicide at Wu Jiang, and thus ended the four-year war between Chu and Han.

At the same year, Liu Bang established the Western Han Dynasty with its capital at Chang'an (formerly Xian Yang). He was the first commoner to become emperor in Chinese history.

After establishing the Han Empire, Liu Bang's fight for power continued. He fought numerous small wars against former allies: Han Xin, Chen Xi, and Peng Yue, in order to consolidate power in west China.

Another power that threatened Liu Bang's supremacy was a confederation of northern tribes lead by a Turkish speaking tribe called Hun. The Hun people were nomadic herders with supplementary agriculture and slaves. The Hun warriors had been making raids into China for a few years. Liu Bang knew that his military was not strong enough to defeat the northern tribes, so he bribed the Huns with food and clothing in exchanged for a peace treaty. He also sent a young woman, who he claimed was a princess, into marriage with a Hun prince.

In an effort to create a centralised management for his empire, Liu Bang needed an army of civil servants. Moreover, for reliable control of the empire, Liu Bang installed his brothers, uncles, and cousins as regional princes.

Liu Bang continued to support the warlords that were in his coalition against the Qin, and made them lesser nobles. Local Qin administrators who supported Liu Bang were left in place, and some friendly nobles were given back their lands.

Liu Bang ruled for less than a decade, and his main contributions were to consolidate the dynasty. He ruled by Confucian principles, changing the old system of legalism. Because he was the first emperor of Han, he was known as the High Emperor of Han (Han Gaozu). He learned the lesson from the cruelty of Qin, and set laws that reduced slavery and encouraged production. The Han Dynasty lasted for 400 years, and Liu Bang was named Han Gaozu.