In the 16th century, Wallachia was independent, but was required to pay an exorbitant tribute to the greater force of the Ottoman Empire. Neagoe encouraged the development of crafts and trade, while maintaining a good relation with Wallachia's other powerful neighbour, Hungary.

His diplomacy attempted to establish connections with the Republic of Venice and the Papacy, even offering to mediate the dispute between Eastern Orthodoxy and Roman Catholicism, with the purpose of uniting Christendom against the Ottoman threat.

He adopted the Byzantine tradition of Church patronage, making generous donations to the Orthodox monasteries, not only in Wallachia but throughout the Balkans. During his reign the Curtea de Argeș Monastery was built (in 1517) - legend names Meșterul Manole as the chief craftsman; the account also fuses Neagoe with yet another legendary figure, Prince Radu (who would've caused Manole's death by ordering for the scaffolding to be removed while the builders were on the roof, ensuring that nobody would use Manole's craft, and thus preserving the uniqueness of the structure).

Neagoe ordered the earliest works on the old Metropolitan church in Târgovişte (the city where the edition of the Gospels was published in 1512) and St. Nicholas Church in Şcheii Braşovului.

Neagoe Basarab wrote in Church Slavonic one of the earliest literary works of Wallachia, called "The teachings of Neagoe Basarab to his son Theodosie" (translated in Romanian as Învăţăturile lui Neagoe Basarab către fiul său Teodosie), where he touches various subjects such as philosophy, diplomacy, morals and ethics.

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