The paper examines the causes and circumstances of the establishment of a Buddhist theocratic state by Lubsan-Samdan Tsydenov, an outstanding figure of Buriat Buddhism. Drawing upon some hitherto unedited Tibetan, Mongolian and Russian sources, the paper undertakes a detailed reconstruction of the events in Siberian Transbaikalia in the period of the Russian Civil War. An analysis of personal notes by Tsydenov and the text of the constitution of the Kudun Buddhist state shows that “Kudun theocracy” was a syncretic fusion of the traditional Buddhist understanding of the Buddhist “Dharmic state” and modernist conceptions of republicanism and constitutional democracy. The Kudun theocracy should also be interpreted as a response of Buddhist circles to attempts by Buriat secular nationalists to build Buriat statehood based upon the idea of national self-determination. The Kudun project shows that Buddhism could serve as a foundation for state-building at the time of the early twentieth-century Russian political crisis.