In early Islamic texts, no accurate and clear description of Buddhist thoughts and teachings has been provided, and most of the related statements in such texts are very general and incomplete. In most sources, some beliefs or acts are attributed to Buddhists which are either basically incorrect or not at all related to Buddhists but followed by other Indian religious sects. In order to find the reason behind this problem, one should refer to the pre-Islamic period and explore the dissemination of Buddhism in those regions which later turned to Islam. Apparently, a defective knowledge of Buddhist teachings is not restricted to the Islamic period; and it was also the same case at least in the western and central regions of Iran before Islam. However, in the eastern parts of Iran and alongside the Silk Route, there were some very important Buddhist centers. Nevertheless, after the rise of Islam, the Buddhist monasteries of these regions were gradually destroyed, and nothing remained from them except a vague memory. Accordingly, when Islamic historiographers decided to speak of Buddhism, they had access to no authentic sources. The present paper is intended to shed some light on the above issues.