As a result of Esther's benevolence, Persian Jews lived in Persia (modern Iran) for 2400 years thereafter. Esther's husband Ahasuerus (Greek: Xerxes I) followed in the footsteps of his maternal grandfather, Cyrus the Great, in showing mercy to the Jews of Persia: Cyrus had decreed an end to the Babylonian captivity of the Jews upon his conquest of Babylon in 527 BCE.

According to the Book of Esther she was a Persian Jewish woman originally named Hadassah. Both Esther and Mordechai's burial is in Hamadan, Iran. When she entered the royal harem she received the name Esther by which she was henceforth known. Hadassah means "myrtle" in Hebrew and the name Esther is most likely related to the Median word for myrtle, astra, and the Persian word setareh meaning star — the myrtle blossom resembles a twinkling star. The Targum provides another Midrashic explanation: that she was as beautiful as the Evening Star, which is astara in Greek.

Given the great historical link between Persian and Jewish history, modern day Persian Jews are referred to as "Esther's Children". Esther can also be understood to mean "hidden" in Hebrew, and her name is interpreted thus in Midrash, where it is said that Esther hid her nationality and lineage as Mordecai had advised. Because the methods and aims of God are believed to be similarly hidden, "The Book of Esther" in Hebrew can be understood as "The Book of Hiddenness," representing God's hiddenness in the story.

It is also possible that Esther is derived from Ishtar, Akkadian for the Evening Star. (Despite resembling Indo-European words for star, the Semitic "Ishtar" is unrelated, the root beginning with a pharyngeal ayin and the sh sound derived from an earlier th sound.) "Ishtar" was worshipped throughout the Middle East as a goddess. Some critics of the historicity of the Book of Esther seized on this as evidence to support a view that the story of Esther derived from a myth about Ishtar. However, in Hebrew the goddess was referred to by the Hebrew cognate of her name - Ashtoreth. "Esther" cannot be derived directly from the latter. The Book of Daniel provides accounts of Jews in exile being assigned names relating to Babylonian gods and "Mordecai" is understood to mean servant of Marduk, a Babylonian god. "Esther" may have been a Hebrew rendition of a form of "Ishtar" in which the "sh" sound had become an "s" sound.

Esther was the daughter of Abihail, a Benjamite. She resided with her cousin Mordecai, who held some office in the household of the Persian king at "Shushan in the palace" and was responsible for thwarting a plot by Bigthan and Teresh, two palace guards, to assassinate the king.

King Ahasuerus, often identified as King Xerxes, held a one hundred eighty-day feast to exemplify his opulence of his finest capital, Susa. Drunk with wine, the King ordered Vashti to join him and his guests, to show off her beauty. Vashti refused the humiliating order and the King was advised to banish Vashti from his presence to make her an example for other disobedient wives. The King obeyed this advice, and then began searching for a new wife. A voluntary competition was held for the women who wished to become the next queen. For 12 months young virgin women were prepared in the harem with beauty treatments. Each women would then present the King with a gift of their choice, and the King would choose his new wife. Esther was a Jewish girl who lived with her uncle Mordecai (who adopted the orphaned girl). Mordecai had changed his niece's Jewish name, Hadassah, to the Persian name Esther. King Ahasuerus chose Esther to be his wife and queen.

Soon after this the king gave Haman the Agagite, his prime minister, power and authority. When Haman would ride his horse down the street all the people would bow to him except for Mordecai, who would bow to no-one but his God. This enraged Haman, and he plotted against the Jews, making a plan to kill and extirpate all Jews throughout the Persian empire. He gained the king's approval for this plan in exchange for ten thousand silver talents. Mordecai tore his robes and put ash on his head on hearing this news. Esther sent clean clothes to him through a maid, but he refused them, explaining that all Jews (including Esther) would be killed and only Esther could stop this genocide - by talking to the King. Esther was not permitted to see the King unless he had asked for her, and if she did she could be put to death. Esther was terrified of this (she had not been called to the king in 30 days), so she and her maid-servants fasted and prayed earnestly for three days before she built up the courage to enter the king's presence. He held out his scepter to her, showing that he accepted her visit. Esther requested a banquet with the king and Haman. During the banquet she requested another banquet with the King and Haman the following day.

After the banquet Haman ordered a gallows constructed, 75 feet high, on which to hang Mordecai. That night the king called Haman and asked, "What should be done for the man whom the king delights to honour?" Haman thought the king meant himself, so he said that the man should wear a royal robe and be lead on one of the king's horses through the city streets proclaiming before him, "This is what is done for the man the king delights to honor!" The king thought this was good, then asked Haman to lead Mordecai through the streets in this way, to honour him for previously telling the king of a plot against him. After doing this, Haman rushed home, full of grief. His wife told him, "you will surely come to ruin!" That night, over the banquet, Esther told the king of Haman's plan to massacre the Jews in the Persian Empire, and acknowledged her own Jewish ethnicity. The king was enraged and ordered Haman hung on the gallows he had built for Mordecai. The king then appointed Mordecai as his prime minister, and gave the Jews the right to defend themselves against any enemy.

A peculiarity of Persian law that also occurs in the Book of Daniel is that royal edicts of this sort could not be reversed, even by the king--by siding with the Jews instead of their persecuters, however, the King presumably dissuaded any pogroms. This precipitated a series of reprisals by the Jews against their enemies. This fight began on the 13th of Adar, the date the Jews were originally slated to be exterminated. The Jews killed three hundred in Susa alone, killing seventy-five thousand (fifteen thousand in the Greek biblical account) in the rest of the empire.

Jews established an annual feast, the feast of Purim, in memory of their deliverance. According to traditional Jewish dating this took place about fifty-two years after the return.

Esther appears in the Bible as a woman of deep piety, faith, courage, patriotism, and caution, combined with resolution; a dutiful daughter to her adopted father, docile and obedient to his counsels, and anxious to share the king's favour with him for the good of the Jewish people. That she was raised up as an instrument in the hand of God to avert the destruction of the Jewish people, and to afford them protection and forward their wealth and peace in their captivity, is manifest from the Scripture account.