This paper aims at the application of new historicist principles to Preston’s Cambyses. It begins with the elaboration of the key assumptions of new historicism. Particularly, the researchers have applied the new historicist concepts such as use of anecdote, historicity of text and textuality of history, discourse and power relations and construction of identity for the purpose of detailed analysis of the play. The available traditional criticism focuses on the topical and political interpretations of the play. The paper evinces a departure from traditional criticism since the researchers contend that Preston has used the literary discourse of Cambyses as an ideological tool to propagate and promote the idea of British Empire and thereby helped fashion the identities of his audience. The play functions as a part of continuum in representing Persians as cultural others with other historical and cultural texts of early modern period. Through the story of a cultural other like Cambyses, the play not only instructs and entertains his audience but also tends to support the dominant ideology of the period. The research findings confirm our contention that the Western playwrights like Preston have deliberately chosen the story to disseminate the idea of British Empire that developed later on but its foundations were laid down in the early modern period.