The Early Classical period was a golden age of cultural development and art and architecture in Nepal Mandala besides being a prolific period for Nepal Bhasa literature. The literary genres prevalent during this era consist of chronicles, epics, stories, scientific manuals mainly dealing with astrology & medicine, didactic poems and drama.^[10][11]

The early works of Newar literature are prose works. The prose works in Newar literature are categorized as technical prose, historical prose, and narrative prose. The technical prose is mainly related to Shastras such as Astrology, Ayurveda, Dharmashastra, Kamashastra, Nītiśāstra, Vādyaśāstra, and mathematics. The Manava Nyaya Shastra and Haramekhalā are examples of early technical prose which deal with Dharmashastra and Ayurveda.^[12] Historical prose is divided into two forms: Vaṃśāvalī (chronicles) and Thyāsaphū (records and diaries about the court and kingdom).^[13] The Gopal Raj Vamshavali is the earliest written historical prose.^[14] Narrative prose is divided into three parts: religious, didactic, and popular.^[15][16] The earliest religious prose works in Newar is Svasthānī Bākhan. The earliest works in didactic and popular prose include Tantrākhyāna (1518) and Śukabahattari.^[17]

A 16th-century manuscript of Svasthānī Bākhan.

Siddhi Narasimha Malla, considered the first Newar playwright.

The kings and queens of the Malla dynasty were keen lyricists and playwrights. Dramas written at the time continue to be performed during annual festivals. King Mahendra Malla (reigned 1560–1574) is regarded as the first Newari poet.^[19] One notable poet who wrote many poems was Jagat Prakash Malla, who composed a collection of 519-poems called Nepālbhāsāyā Gita.^[20] Siddhi Narasimha Malla composed a 31-poem collection called Gopināthyā Gita, some of whose poems are still sung in Kartik Pyakhan.^[22] Similarly, Jagajjyoti Malla composed a poem collection called Nānārtha Pañcadaśa Gita.^[24] Srinivasa Malla is known for his poem nārāyaṇa suragana saṃsāra na bhina, which is the longest poem in the Newar language. Another prominent poet was Pratap Malla, who is known for giving himself the title of Kavindra ("the King of poets").^[25] He composed 145 poems; however, 98 poems have been lost and only 47 poems have been found.^[26] The queen Riddhi Laxmi (1680–1687), is the Nepal's first woman poet as her poems are the earliest attested poems written by a woman. The queens Jaya Lakshmi, Bhuvan Lakshmi, Briddhi Lakshmi and Kumudini Devi were also prominent Newar poemwriters.^[27] Among the public, Jagat Keshari (1678) of Banepa in the east of the Kathmandu Valley is celebrated for a hymn dedicated to Goddess Chandesvari.^[29][30]

Siddhi Narasimha Malla was the first Nepal Bhasa playwright. He wrote the first Newar play entitled Ekādaśīvrata in 1633. His most famous work is Kārtika Pyākhan (1641) which is shown annually at Patan Durbar Square. Srinivasa Malla is known to have added seven days in Kārtika Pyākhan by adding his play Bāthaḥ Pyākhaṃ. Ranajit Malla’s Śaniścara Rohiṇī Pyākhan, is considered the longest play written in the Newar language. Jaya Prakash Malla wrote several dramas such as Ratneśvara Prādurbhāva, Viradhvajopākhyān Nātaka and Yayātyupākhyāna.^[34] Other playwriters during the classical period includes Yoga Narendra Malla, Bhupalendra Malla, Bhaskara Malla, Jagajjaya Malla, Jagat Prakasha Malla, and Bhupatindra Malla.

Other than original poems, plays, and stories, many translations and derivative works of Sanskrit texts were written in the Newar language during the early classical period. Kings like Jagajjyoti Malla and other rulers commissioned translations of Narapatijayacaryā (1617) and various other Sanskrit texts. Many non royal authors like Dukhi Bhāro composed Newar version of the epic Ramayana and other religious texts. Similarly, numerous Puranic texts were translated, which expanded and enriched the corpus of religious literature. Some of Puranic works in Newar includes Mārkaṇḍeya Purāṇa (1617), Liṅga Purāṇa (1621), Paśupati Purāṇa (1632), Brahma Purāṇa (1695), and Svayambhū Purāṇa (1745).

During the later part of the Classical period, early Shah kings patronized and wrote several poems, devotional songs and plays. Among the Shah kings, Rajendra Bikram is famed for writing Mahāsatva Pākhyān (1831), a play based on a Buddhist story.^[36] King Prithvipal Sen of Palpa, during his stay in Kathmandu Valley, had commissioned plays such as Hanumān Nāṭaka in the Newar language.^[37] Pandit Amṛtānanda Śākya composed several poems and wrote the play Hanumān Nāṭaka in 1800 under the commission of King Prithvipal Sen.^[39] Besides composing poetry and play, he also wrote the first grammar of Nepal Bhasa in 1831 and a devotional hymn called Carapatipāda Stotra.^[40] Similarly, Pandit Sundarānanda (circa 1793–1833) wrote a epic and poems.^[42] Vijayānanda Rājopādhyāya, who was court poet in the court of Girvan Yuddha Bikram Shah, composed many devotional songs and hymns.^[44]

A number of prose works and stories during the late classical period were narratives based on Ramayanas, and Avadānas. Some of these include Maheśvara Āju's Rāmāyaṇa (1784), Saptakāṇḍa Rāmāyaṇa (1818), Adhyātma Rāmāyaṇa (1829), and a Rāmāyaṇa by an unknown author dated to 1846. Similarly, some popular Avadāna stories include Kuśāvadāna (1778), Aṣṭamivrata Māhātmya (1777), and Ahorātravrata Kathā (1840).^[45][47]

After the Gorkha conquest of Nepal in 1768 and the advent of the Shah dynasty, the Nepali language, formerly known as Khas kura or Gorkhali, began gradually edging out Newari^[48][49] Overt suppression was started by the Rana dynasty (1846–1951).^[50] In 1906, official documents written in Newari were declared illegal. The use of the language in land registration, business and literary purposes was forbidden.^[51] Books were confiscated and writers were jailed.^[52] As a result, not only literary creations but also writing for general purposes almost ceased; and the distance between the spoken and the written language began to widen.^[53]

Several poems, hymns and religious stories were produced during this period. Notable writers of the era were Ranabir Singh Thapa (younger brother of famed prime minister Bhimsen Thapa), Hari Bhakta Mathema, Man Bahadur Joshi and Bir Bahadur Malla.^[55]

During renaissance period, a new generation of writers emerged who asserted themselves by producing literary works defying government restrictions. The renaissance aimed to restore the Newar language's lost glory and stimulate creative literature. The activities of this period laid the foundation for the future course of the language. The Nepal Bhasa movement dates from this period.

The renaissance also marked the advent of private printing presses and the end of handwritten books. In 1909, Nisthananda Bajracharya published the first printed book in Newari, Ek Vimśati Prajñāpāramita, a Buddhist text. In 1913, Siddhidas Mahaju composed Siddhi Ramayana, a Newar version of the Hindu epic.^[59] Jagat Sundar Malla worked to promote education. In 1925, Dharmaditya Dharmacharya published Buddha Dharma wa Nepal Bhasa, the first ever magazine in Newari, from Kolkata, India.^[62] Authors also worked to standardize the grammar and spelling, and new literary styles and genres were embraced. A grammar of the language, the first in modern times, was published in 1928 by Shukraraj Shastri.^[64] The most important figures of this era were:^[66]

• Nisthananda Bajracharya
• Siddhidas Mahaju
• Jagat Sundar Malla
• Yogbir Singh Kansakar
• Shukraraj Shastri