For a short time, a small, separate federation known as the Karak Kingdom (1st to 6th century CE) existed. It was a small kingdom in the Kimhae area situated on the southern coast between mighty Paekje and fast-growing Shilla. Kaya could not repel an invasion in the mid-sixth century and so was annexed to Shilla before reaching full maturity.

The Samguk-yusa says that there was a stone pagoda in Hogye-sa in Kimhae. This pagoda had four sides and five storeys, and the carvings on the sides were famous for their magnificence. It is known that this pagoda was brought by sea to Korea by an Indian princess from Ayudhya a kingdom of southern India. She came to marry King Suro (r. 42-199) the first king of Karak and she was later known as Queen Hohwang-ok. As far as the records show, until the arrival of the Indian princess, there were no temples and no Buddha statues and the people knew nothing about Buddhism. Because of this, there was no place to keep the pagoda. It was only later, in 452, in the 2nd year of the 8th Karak king, Chilji (r. 451-492), that Wanghu-sa was built.

Information about the Karak Kingdom is of particular interest because the princess came from a Buddhist stronghold in India and most probably brought statues and texts with her. However, according to the above record, Buddhism was not popular in Karak before the building of the temple. This is not surprising considering that this would mean that Buddhism was accepted in Karak before Shilla and even before Koguryo. Unfortunately, we know very little about Karak but there are a few legends concerning Buddhism told about the kingdom.

One is about the story of King Suro's decision on where to place the capital of Karak. Another is about Mano-sa (the temple of 10,000 fish). There are also two stories one about the temple Changyu-sa and another about the hermitage Ch'ilbul-am. But these stories do not necessarily contain any historical truth and so cannot be considered too serious-ly. Till we have certain new historical evidence, we must think of the above legends as indications of Karak Buddhism only.