Phalodi was initially called Phalvardhika. It was later renamed as Phalodi. The town is known as Phalodi after the Phalodi Fort was named at the request of Phala, the widowed daughter of Brahman Sidhu Kalla,who gave a generous contribution in cash to build the fort.
It is situated between latitude 27°-06 to 27°-09 north and 72°-20 to 72°-23east on the Jodhpur-Jaisalmer railway line. It is the second largest town in the district and is also the sub-divisional headquarters. The town is situated at distance of 140 km. from Jodhpur. The present population of the town, as per census 2001, is 44,756. A number of Government & semi government offices are situated in the town. Phalodi is surrounded by Bikaner, Nagaur & Jaisalmer Districts. It is well connected by road and railway. The railway station of the town was established in 1914. National Highway 15 (Pathankot-Kandla) and State Highway No. 2 ( Jodhpur- Jaisalmer) passes through the town.
It is well known for migratory bird ”Kurja” (Crane). The village Khichan is hardly four km. away from Phalodi. The town is a prime place for commercial and industrial activity of surrounding hinterlands. Phalodi was established in mid 15th century. In 1488, a Fort was constructed by Hamir Singh, the grandson of Rao Suja. He did a number of developmental works during his period. In 1230, famous Kalyan Raoji’s temple was constructed. The temple of goddess Latiyal Devi and Santinath are some of the oldest temples of the town. The Parsnath Jain temple established in 1847 by the Oswal Jain community has been made only in stone and does not have any girders or RCC construction. It is made of old Belgium glass. This Jain temple is considered a marvel in architecture.
In 1547, Rao Maldeo was the ruler of Phalodi. But in 1578 it was handed over to Rai Singh, the King of Bikaner by the emperor Akbar. In 1615, it came under the control of Rao Soor Singh of Jodhpur State and thereafter remained a part of state of Jodhpur.
The stone epigraphic inscriptions in the Kalyanji-Ka- Mandir indicate existence of a town called as Vijay Nagar Patan which is now known as Phalodi. In 2008 a major renovation was done in the Latiyal Mata Temple and a silver throne (singhasan) for Latiyal Mata was made.
Phalodi also has a large number of communities living in it. The majority are Brahmins. Small industries flourish in Phalodi. The town is well known for the large number of industries for the production of sodium salt and Plaster of Paris. Phalodi is largest supplier of salt in India.