Alakā (Alaka) is the city inhabited by the Yakṣa(s) (Yaksha; a kind of demigod), located on the mountain range called Gandhamādana (Gandhamadana), in mountain Kailāsa (Kailasa). It is the capital of Kuvera. Driven away from Laṅkā by Rāvaṇa, Kuvera came to live near Kailāsa, and he established the city of Alakā. There is also a lake called Alakā, full of blooming loutses.

In Vanaparva of Mahābhārata (Mahabharata) and Brahmāṇḍapurāṇa (Brahmandapurana), there is a description of Alakāpurī. Paraśurāma, after slaying Kārtavīryārjuna, his sons and many other kings, came to this place. The Pāṇḍava(s) once came here, too. The whole city was full of high palaces, decorated with jewels. There had been an abundance of beautiful gardens and lakes, surrounded by golden walls . The river Alakānandā, flowing round the city, was full of sweetened water. The whole city was full of the birds songs, and the songs of the Gandharva(s) and Apsarā(s) were always heard.

From Purāṇa and Mahābhārata, it is known that Purūravā and Urvaśī were united in this city. King Yayāti also consummated with the Apsarā Viśvācī in this place.
According to Mahābhārata and Purāṇa, Alakāpurī was situated on the mountain Gandhamādana, near Kailāsa. In the writings of Kālidāsa, this is supported as well. However, according to some scholars, it was a city in the Uttarakuru region.