The exaltations are one of the most ancient astrological factors still in use. They are found in Mesopotamian sky omens, before the appearance of Horoscopic astrology. Why the Babylonians considered these placements to be dignified is not known. Although many speculations concerning the reasoning behind it have been put forth over the centuries, there are, as Hand has said, still anomalies that are almost impossible to explain with any consistency, such as the exaltation of vigorous Mars in cold Capricorn. The Western sidereal astrologer, Cyril Fagan, has speculated that the planets all happened to be in these signs at the time of the erection of an important Babylonian temple to their god Nabuin the year 786 BC, but this is still very speculative; it should also be noted that it is astronomically impossible for Mercury to be in Virgo while Sol is in Aries. Possibly the most accepted theory is that the Babylonians considered planets in exaltation to be the rulers of these signs, although these rulerships changed later with the development of horoscopic astrology in the early common era. Although the Ancient Greeks later adopted the more familiar domicile rulerships, they also incorporated the Babylonian rulerships, including both as different essential dignities in horoscopic astrology.
Since, in Hellenistic astrology, and in its cognate, Vedic astrology (much as it is still practiced in India), all aspects were from sign to sign and not from individual degrees (the very concept of "orbs" of aspect was unknown until the Arabs), it is unlikely that the distance of a planet from the exact degree of exaltation or fall had much weight. However, the point itself was very important as one of those numerological places the ancient astrologers used frequently. For example, the exact degree of exaltation of each of the luminaries (the Sun and Moon) was used in the formula for the Hellenistic Lot of Exaltation, which used for the Lot the distance between each luminary and its degree of exaltation, projected from the Ascendant. It was a position of great strength in the natal chart, and certainly one of the most important of the Lots.
However, in modern Vedic astrology, a planet which is before the exact degree of exaltation partakes in the exaltation; however, a planet coming later by degree in the sign of exaltation from the exact degree itself is usually not considered, in a strict sense, to be exalted. This may be a reflection of the idea originally obtained from Greeks in Asia who transmitted horoscopic astrology to India, or it may be a later accretion.
In later Medieval astrology, influenced by the Arab and Byzantine writers active after the end of the Classical era, a hierarchy of all five essential dignities was favored, in which the most important dignity was that of the domicile ruler, followed in importance by exaltation. Medieval astrologers assigned numerical values to each dignity in the hierarchy, and these were tabulated to provide a rough statistical mode of comparison (see Essential dignity.) These weighted valuations are still in use today by astrologers, although in a simplified form.
After the discovery of the three outer planets--Uranus, Neptune, and Pluto--modern astrologers sometimes speculated on possible domicile and exaltation rulerships for these planets. It was suggested, for example, that Neptune was the "true" domicile ruler of Pisces (usurping one of Jupiter's two domicile rulerships) and that Neptune was exalted in Cancer, or possibly in Scorpio (which had no traditional exaltation.) Similarly, as the idea became popular, the third degree of Gemini was postulated as the exaltation of the north lunar node and the third degree of Sagittarius as the exaltation of the south lunar node.
But the ancient system was complex and symmetrical, making no allowance for additional, unseen planets, and it is difficult, if not impossible, to include them in traditional techniques. For that reason, most modern astrologers have abandoned attempts to assign exaltations to these newer planets, although many still assign them domicile rulerships.
The sign position directly opposite a planet's sign of exaltation is considered to be its fall. As the exaltation is a place of great strength and integrity for the planet, the fall is a position of weakness and distortion.