Towards the end of the 1st quarter of the 16th century, under Phaya Kaeo, Lanna's power began to decline. Rivalries between officials grew, as the cost of royal projects added to internal strife. Foreign relations received little attention, and there were many fights with the Shans. Too many slaves, and temples controlling too much real estate, according to ChiangMai University historian Hans Plenth, made for inflation, quite mysterious and enigmatic to the people, of over 40% per annum. In order to finance religious projects, new city walls, and military excursions, Kings began declaring lesser amounts of money to be more!

Without justice, nations are mostly a method of wholesale robbery. When the strength of a king increases wealth and security, encourages instruction and provides understandable law, his name becomes legend. But when too much is demanded of workers and/or peasants, and little moral authority shown, rule dies. Great power leads to great vanity, and in turn great injustice. Suddenly, allegiances switch. In such times of revenge and retaliation, places frequently change names; total histories, indeed, change. These realities almost eradicated the memory of Lanna.

The king in 1538, Phaya Ket, also known as Chettatirat or Muang Kesa (accounts vary), was deposed by generals and ministers he didn't kill despite awareness of them conspiring against him. He was exiled and his son T'ai Sai Kham coronated. For cruelty and misgovernment, T'ai Sai Kham was assassinated in 1543, perhaps by the same ministers and generals who exiled, then recalled, Ket. Ket lasted only two more years before being assassinated himself. His killers were then killed, and two choices for succession refused to accept. In the 25 years between King Kaeo and Lanna's last king, no reign ended peaceably; for the last 4 years, there was no central ruler at all.

In 1545 Mong Nai attacked Chiang Mai, just before an earthquake destroyed significant reliquaries there. The Shans built a bamboo bridge to cross the city moat, and for a month tried to fill the moat with dirt. Eventually the defenders burnt the attackers' encampment, and the Shans withdrew. Then a woman, Mahatewi Jiraprapa, was given rule as, in February 1546, an army from Ayudhaya under Boromaraja II threateningly approached. Either Jiraprapa persuaded them to hold off, or, as the Chiang Mai Chronicle says, "He was defeated and fled." A 12-year-old nephew of Phaya Ket, Setthathirat (Upayo) from Luang Prabang in Lan Sang, was invited to rule under Jiraprapha's regency. In May, 1546, he came to Chiang Saen and Chiang Rai, and appointed local rulers. He stayed in Chiang Mai until August 1547. Setthathirat's father, King Phohthisat (Potisan) of Luang Prabang (married to a Chiang Mai princess, Ket's sister), was killed during an elephant round-up, by accident. So Setthathirat returned to Luang Prabang, in order to maintain authority there, effectively abandoning Lanna. In April 1551, according to the Chronicles, he handed Chiang Mai over to "the queen."

When Setthathirat left, he took the Phra Kaeo Morakot (Emerald Buddha), other important Buddha images, religious texts and treatises, and many monks and scholars, with him. Lanna found itself in a state of civil war lasting four years, while petty officials and rulers of principalities fought amongst themselves for what they could get.