Abaoji, a notable leader from the Yila tribe, was designated khagan by a council of Khitan tribal chieftains, which served to formalize his leadership over the disparate tribes inhabiting the northeastern steppe. His ascent to power was characterized by his military prowess, diplomatic negotiations, and ability to forge alliances among various tribes, reflecting an emerging sense of unity among the Khitan people. This unification was crucial for the Khitans, whose decentralized tribal structure had previously led to conflicts and rivalries within their ranks.

The naming of Abaoji as khagan symbolized the consolidation of power and the establishment of a more structured political identity for the Khitans. This effective leadership laid the groundwork for the Khitan Empire, formally known as the Liao Dynasty, which would emerge, exerting significant influence over northern China and beyond. As khagan, Abaoji embarked on campaigns that extended Khitan control into the surrounding territories, allowing for the expansion of trade, culture, and military strength.

Another critical aspect of Abaoji's leadership was his ability to adapt to changing dynamics within the region, particularly in relation to the powerful Tang Dynasty. His strategies included cultivating diplomatic ties with neighboring states while simultaneously preparing for conflict, which illustrated a dual approach to governance. Under his leadership, the Khitan people began to refine their social structures, adopting elements of Chinese culture while still preserving their nomadic heritage, which would later influence the character of the Liao Dynasty.