Babylon was at first a small town which sprung up at the beginning of the 3rd millennium BCE. The town flourished and became well-known and important. Babylon eclipsed Nippur as the 'holy city' of Mesopotamia. This was about from 612 to 539 BCE. It was the time Hammurabi first unified the Babylonian Empire. Babylon became the capital city of the Neo-Babylonian Empire .