It is a former medieval trading center and the historic capital of the kingdom of Jaisalmer, founded in 1156 by Rawal Jaisal of the Bhati clan of Rajputs.

The term "Mer" or "Meru" is of Sanskrit origin, signifying a mountain or a high, prominent place,[13] and it has been historically used in the names of various geographical features and landmarks, like Ajmer.

According to Satish Chandra, the Hindu Shahis of Afghanistan made an alliance with the Bhati rulers of Multhan, because they wanted to end the slave raids made by the Turkic ruler of Ghazni, however the alliance was defeated by Alp Tigin in 977 CE.

A severe drought and the resulting famine from 1895 to 1900, during the reign of Salivahan Singh, only made matters worse by causing widespread loss of the livestock that the increasingly agriculturally based kingdom relied upon.

The attempts of Jawahir Singh (1914–1949) at modernisation were also not entirely successful in turning the kingdom's economy around, and the drylands of Jaisalmer remained backward compared with other regions of Rajputana, especially the neighbouring state of Jodhpur.

Nonetheless, the extensive water storage and supply, sanitation, and health infrastructures developed in the 1930s by the prime minister Brijmohan Nath Zutshi provided significant relief during the severe droughts of 1941 and 1951.

During 1930–1947, Jawahir Singh and his ministers also promoted technical education and the academic disciplines of civil and mechanical engineering in the state.

Built in 1156 by the Bhati Rajput ruler Jaisal, Jaisalmer Fort, situated on Meru Hill and named as Trikoot Garh has been the scene of many battles.

Its massive sandstone walls are a pale yellow colour during the day, turning to a darker gold as the sun sets.

Known for their exquisite work of art and architecture that was predominant in the medieval era the temples are built out of yellow sandstone and have intricate engravings on them.

There are many pilgrimage centres around Jaisalmer such as Lodhurva Jain temple (Lodarva), Amarsagar, Brahmsar and Pokharan.

Desert Festival of Jaisalmer is the most awaited and famous cultural and colourful event of Rajasthan.

This is the best time to visit Jaisalmer to witness performing arts like Kalbelia dances and folk songs and music.