The majority of Jaisalmer's inhabitants are Bhati Rajputs, who take their name from an ancestor named Bhatti, a renowned warrior when the tribe were still located in the Punjab. Shortly after this the clan was driven southwards, and found a refuge in the Indian desert, which was henceforth its home.

Deoraj, a prince of the Bhati clan, is believed to be the real founder of the Jaisalmer dynasty. In 1156 Rawal Jaisal, the sixth in succession from Deoraj, founded the fort and city of Jaisalmer, and made it his capital as he moved from his former capital at Lodhruva (situated about 15 km to the north-west of Jaisalmer).

The Maharajas of Jaisalmer trace their lineage back to Jaitsimha, a ruler of the Bhatti Rajput clan. The major opponents of the Bhati Rajputs were the powerful Rathor clans of Jodhpur and Bikaner. They used to fight battles for the possession of forts, waterholes or cattle. Jaisalmer was positioned strategically and was a halting point along a traditional trade route traversed by the camel caravans of Indian and Asian merchants. The route linked India to Central Asia, Egypt, Arabia, Persia, Africa and the West.