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The city was founded in 1748 by Muhammad Bahawal Khan Abbasi I , whose descendants ruled the area, until it joined Pakistan in 1947.

It is a crossroads city, having the only railroad bridge over the Sutlej. The surrounding area is mostly agricultural, and the city is a market town for dates, wheat, sugarcane, and cotton. In addition, it has soap making and cotton spinning factories, as well as enterprises producing silk and cotton textileThis article is about the type of fabric. Textile is also a jargon term used by naturists or nudists to describe a person who wears clothes, and also the property that nudity is not allowed, e. in "textile beach", "textile campsite", etc. A textile is anys, carpetCarpet is a general term given to any loom-woven or felted textile and to grass floor coverings. Historically, the term was also used for table and wall coverings. Some distinguish between carpet and rug based on size (the former being larger) or use (cars, and potteryPottery is a form of ceramics technology, where wet clays are shaped and then dried or fired to harden them. The term is generally used only for relatively easily constructed utensils such as pots, cups, bowls, etc. and for decorative items but not for co.

The Islamia University is located in Bahawalpur.