During the socialist period in Mongolia (1921–1990), the public practice of Buddhism, along with other religious practices, was restricted. Since the Democratic Revolution of 1989–1990, the practice of Buddhism has been permitted in public. Today Buddhism is the main religion of Mongolia, following the Vajrayāna tradition of Buddhism. As well as having strong ties to international Buddhist lineages and organizations, Buddhism in Mongolia has unique characteristics.

In the early 1990s old lamas from the presocialist period reinhabited old temples, built new temples, and took on students. They reinvigorated old practices and rituals that they had practiced in secret during the socialist period, or those they had remembered from the presocialist era as young lamas. In addition to this local reinvigoration of Buddhist practice, in the 1990s translocal Buddhist organizations came to Mongolia with the hope of helping to rebuild Buddhism. They brought with them their own expectations about education, religious practice, and monastic discipline. Along with these transnational Buddhist ideas and practices, other local religious practices, such as shamanism, and translocal religious practices, such as Christianity and new religious movements, established themselves in the country. These local and translocal forms of religion generated the proliferation of a wide range of unique ideas and practices that have characterized Mongolian Buddhism since 1990.

As Buddhism in the democratic period is the main religion in Mongolia, it has become a source of geopolitical significance. The strong ties between Mongolian Buddhist institutions and Tibetan Buddhist organizations in diaspora have been a cause of diplomatic friction between Mongolia and China. These ties with Tibetans in diaspora have also affected power dynamics internally within Mongolian Buddhist organizations. Mongolian Buddhism in the democratic era is an important local religious practice, a source of translocal connections and transformations, and has geopolitical significance.