Phalodi was initially called Phalvardhika. In Vikram Samvat 1515, Shri Siddhuji Kalla have founded Phalodi by grass of Shri Maa Latiyal with named as Phalvaridhika which was later renamed as Phalodi at the request of Phala, the widowed daughter of Shri Sidhu Kalla, who gave a generous contribution in cash to build the fort of Phalodi.
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 and semi government offices are situated in the town. Phalodi is surrounded by Bikaner, Nagaur and 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.